Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

WEST MIDLANDS COUNTY COUNCIL BILL [Lords] (By Order)

Order read for resuming adjourned debate on Question proposed [28 June],

That the Bill be now considered.

Debate further adjourned till Thursday 20 December.

TYNE AND WEAR BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time upon Thursday 20 December.

Oral Answers to Questions —

Mr. Speaker: I make my customary appeal for supplementary questions to be brief, as that will enable me to call more hon. Members.

Oral Answers to Questions — HOME DEPARTMENT

Television Licence Fees

Mr. Hardy: asked the Secretary of State for the Home Department what are his estimates of the cost of collection of television licence fees and of the detection of licence evasion, in the current year.

The Minister of State, Home Office (Mr. Leon Brittan): It is estimated that the cost of collecting television licence fees and enforcing the television licensing system will amount to about £24 million in the current financial year.

Mr. Hardy: Is the Minister aware of the growing anger that is felt, particularly by pensioners, at the 36 per cent. increase in the licence fee? Does he not believe that it will mean at least 1 million cases of licence evasion in 1980? Does he propose to increase the already hefty expenditure to which he referred in his answer?

Mr. Brittan: I do not accept that the increase in the licence fee was unreasonable. The previous Administration allowed the BBC to go substantially into the red because they were reluctant to put the licence fee up to the level that was required.. It is a slur on old-age pensioners to suggest that because of the increase there will be massive evasion next year.

Mr. Fell: Is my hon. and learned Friend aware that he can get rid of that burden on the nation by refusing to grant the next franchise to the BBC and giving it to commercial companies? If that diminishes the influence of the brontosaurus-like BBC, that will be a good thing, and if by doing that it stops some viewing that also will be a good thing.

Mr. Brittan: We are not considering that option, nor should we do so. Despite the BBC's faults—and every institution has faults—it is performing an extremely valuable broadcasting service.

Mr. Hill: Can my hon. and learned Friend say what percentage of moneys collected are received in payment for licences for black and white television? If it is a minimal amount, could not old-age pensioners be allowed, in the near future, to have black and white sets without paying for a licence?

Mr. Brittan: During last Thursday's debate I envisaged that over a period of time that might be a direction in which we could move to solve a problem that we all understand and appreciate. However, that cannot be done in the near future.

Obscenity and Film Censorship

Mr. Michael McNair-Wilson: asked the Secretary of State for the Home Department if he will make a statement about the Williams committee report on obscenity and film censorship.

Mrs. Renée Short: asked the Secretary of State for the Home Department if he will make a statement on the report of the Committee on Obscenity and Film Censorship chaired by Professor Bernard Williams.

The Secretary of State for the Home Department (Mr. William Whitelaw): The Williams committee has put forward comprehensive proposals for the reform of the laws relating to obscenity and film censorship. The Government will wish to examine the proposals carefully and to take full account of parliamentary and public opinion.

Mr. McNair-Wilson: While welcoming my right hon. Friend's words, may I remind him that the committee has sat for two years and that there have been more than five Bills since 1959 on that subject? Since the committee admits that the law is in a mess, the nation requires an urgent answer from the Government to the recommendations that have received such widespread approval.

Mr. Whitelaw: My hon. Friend will be the first to appreciate that it is a question not only for the Government but for the House and for public opinion. The

Government should not proceed without a wide measure of public agreement. That is why we wish to hear the views of the House and of people throughout the country. In the meantime, as my hon. Friend knows, a Private Members' Bill is going forward. There may be doubts about how successful that Bill will be, but if it has some success, and if the House feels that it should go forward, the Home Office will certainly not try to stop it.

Mrs. Short: As the right hon. Gentleman is aware, the Williams committee made certain relevant proposals to protect both adults and children from seeing hard porn and from being exploited by it. It also made proposals to put the blue-film clubs out of business, and that cannot be bad. Will the right hon. Gentleman assure the House that he will resist the hysterical comments that were made by some people who criticised the report even before it had been published and before they could possibly have read it?

Mr. Whitelaw: I noticed that some people made a number of comments about the report before they had read it, and after reading it some felt that they had to retract some of those comments. I fully appreciate that point, and we ought to consider very carefully what the Williams committee actually said, rather than what some people thought that it might have said.

Mr. George Cunningham: After Members have had time fully to study the Williams report, may we look forward to an occasion—perhaps early in the new year, and certainly before Easter—when there will be a debate in the House so that the Government can be told what the House thinks about the Williams report?

Mr. Whitelaw: I can only say that that must be a matter for my right hon. Friend the Leader of the House.

Mr. Sever: May I press the right hon. Gentleman to make representations to his right hon. Friend to bring this matter to the House for consideration? In the meantime, will he seek the views of local authorities, which at the end of the day have a difficult task to perform in relation to film censorship, and so on? Has he so far received representations on the matter from authorities?

Mr. Whitelaw: I cannot say offhand whether I have received any representations, but I can say that I shall wish to take all those that I do receive into careful account. As for a debate, I shall, of course, speak to my right hon. Friend the Leader of the House. Such a debate would be very welcome, but there are many pressures on Parliament's time.

Mr. Maclennan: Does the Home Secretary realise that it would be unfortunate if he and the Government were to delay consideration of this matter during the passage of Private Members' legislation through the House, particularly as we have gone beyond the stage at which the issue of principle can be considered? Will he therefore respond to the suggestion of my hon. Friend the Member for Islington, South and Fins bury (Mr. Cunningham) that the House should be given an opportunity to consider this issue before Easter?

Mr. Whitelaw: The hon. Gentleman seeks by a side wind to push me into saying something which he and I know I should not say. I shall add only that I shall speak to my right hon. Friend the Leader of the House.

Mr. Russell Kerr: Be bold.

Mr. Whitelaw: If the hon. Gentleman wishes me to be bold, he should remember that I was once Leader of the House, and I deeply resented those of my colleagues who were bold then. I had better not be bold now.

Court Staffs

Mr. Stanbrook: asked the Secretary of State for the Home Department if he will make proposals for the reform of the system governing the pay and conditions of service of court staffs.

Mr. Brittan: The pay and conditions of service of magistrates' courts staff in England and Wales outside inner London are under review by the Clegg Commission, and the pay and negotiating machinery for the staff in inner London are under review by the staff and their employers in a joint working party. I think we should wait for those reviews to be completed before considering in consultation with those concerned whether any changes in the present negotiating arrangements are desirable.

Mr. Stanbrook: Does my hon. and learned Friend agree that the recent strike of court staff in London revealed the utter confusion that exists in this area, with responsibility being shared between the Home Secretary, the Lord Chancellor, the Chief Magistrate and goodness knows who? Will he make proposals to rationalise this state of affairs as soon as possible after the matters that he has mentioned have been concluded?

Mr. Brittan: The recent strike has led us to think about whether the present arrangements are the most sensible. I think that it would be wise to wait until the outcome of the consideration that is taking place before coming forward with any firm proposals. When we do, we shall obviously have to consult all concerned.

Vehicle Excise Duty (Enforcement)

Mr. Costain: asked the Secretary of State for the Home Department if he is satisfied with the present procedure for the prosecution of owners of vehicles which do not carry a road fund licence whilst on a public road; and what proposals he has to simplify and speed up this procedure.

Mr. Brittan: My right hon. Friend the Minister of Transport has responsibility for enforcing prosecution of the offence of using a motor vehicle whilst on a public road without a valid licence. In a writteen answer on 30 November he announced the Government's intention to retain vehicle excise duty and to increase the enforcement effort. The separate offence of failing to display a valid vehicle excise licence is dealt with either by normal prosecutions in the courts or by the fixed penalty procedure, at the discretion of chief officers of police.

Mr. Costain: Does my hon. and learned Friend appreciate that if someone does not display a road fund licence on his vehicle he is told that he is a naughty boy and that he should buy one, whereas if he does not have a television licence he is fined? Why the difference?

Mr. Brittan: He can be fined on both occasions. It is just a question of enforcement. It is true that if he does not have a licence on his vehicle, that is an offence


that can be dealt with either by prosecution or by the fixed penalty procedure. However, it is an offence.

Mr. Sever: The hon. and learned Gentleman may not be aware that his right hon. Friend the Minister of Transport indicated in a letter to me recently that there was some degree of confusion between the Home Office and the Ministry of Transport over this problem. Will the Minister enter into talks with the Ministry of Transport in order to decide how best this evasion can be curtailed?

Mr. Brittan: If the hon. Gentleman cares to send me a copy of the correspondence, I shall consider the matter.

Mr. Burden: Is it not a fact that if a vehicle does not have a road fund licence, automatically it is not insured, and therefore if any claims are made in respect of an accident there is no possibility of getting compensation?

Mr. Brittan: It would be most unwise of me to give off-the-cuff legal advice of that kind.

School Premises (Public Meetings)

Mr. Palmer: asked the Secretary of State for the Home Department if he will introduce legislation to amend section 83 of the Representation of the People Act 1949, to make it obligatory that meetings held free of charge in school premises to further the candidatures of nominated persons for local government office shall in fact be public and not private or ticket meetings.

Mr. Brittan: We are reviewing the law on election meetings in the context of the Government's general examination of public order legislation.

Mr. Palmer: Is the hon. and learned Gentleman aware that in the summer of this year, during the course of a local government by-election in the Eastville ward of my constituency, a public meeting held by an extremist organisation—the National Front—was heavily guarded by police, and members of the public, including the headmistress of the school, were excluded from it? Is he also aware that the chief constable and the solicitor to the Avon education authority have expressed to me their concern about the present state of the law?

Mr. Brittan: I can understand the concern about the present state of the law, and it is exactly for that reason that we are reviewing it. The position is that only if it is possible to have a generally acceptable watertight definition of what is a public meeting will it be possible to make any change. I think that it is right to consider that in the context of other changes in public order legislation.

Mr. Edward Lyons: Will the hon. and learned Gentleman inform local authorities that there is no obligation to let schools to the National Front, or to any other political organisation, if the meetings are to be all-ticket or private, because for election purposes they must be public meetings? If, therefore, there is an indication that such meetings will be private or all-ticket, no local authority needs to grant the use of a school to the National Front in the first place.

Mr. Brittan: Section 83 of the Representation of the People Act 1949 deals with that point, in that it entitles a candidate at a local government election to use a suitable room free of charge in a publicly maintained school, but only for what is a public meeting of which reasonable notice has been given and which does not interfere with the use of the premises for educational purposes. I am sure that local authorities will heed that limitation.

Demonstrations (Police Costs)

Mr. Adley: asked the Secretary of State for the Home Department if he will call for a report from the Commissioner of Police of the Metropolis on the costs to public funds involved in the Labour Party and Trades Union Congress march in London on 28 November; and if he will make the report available.

Mr. Whitelaw: No, Sir. As I said in my reply on 3 December to questions by the hon. Member for Ogmore (Mr. Powell) and my hon. Friends the Members for Preston, North (Mr. Atkins) and for The Wrekin (Mr. Hawksley), the cost could be calculated only at disproportionate expense.

Mr. Adley: If organised groups indulge in activities of the sort that require a massive police presence—be they political rent-a-mobs or Manchester United—does not my right hon. Friend think that


the organisers and not the taxpayers should be asked to pay the bill? As more than 4,000 police were on duty on that occasion, does not my right hon. Friend at least think that Transport House should make some contribution towards the public purse?

Mr. Whitelaw: I can see the attraction of that proposal, but it is important to appreciate that one cannot say that the responsibility for any disorder always lies in the first instance with those who organise or participate in the event. That is an important point which one must accept. At the same time, I should like to add that I appreciate that that particular demonstration was organised very well, that it required a lot of police, but that it went off peacefully. That is to the credit of those who organised it.

Mr. William Hamilton: Does the Minister agree that it is a vital right of the individual to march and protest, preferably in the peaceful and organised way in which this march took place? I was on that march, and I marched side by side with the hon. Member for Chichester (Mr. Nelson). He made an important speech against the Abortion Bill from the plinth in Trafalgar Square, and it went down very well.

Mr. Whitelaw: Far be it for me to comment on a speech that I did not hear from my hon. Friend the Member for Chichester (Mr. Nelson) about the Abortion Bill. Of course the hon. Gentleman is perfectly right. Everybody has the right to protest—it is an essential part of our freedom. However, those who march must appreciate what their action means for the police. They are using massive police resources and removing police from many other areas where, no doubt, they could be employed dealing with criminals and looking after people's property.

Mr. Marlow: Is my right hon. Friend aware that when the Barbarians rugby team came to this country from South Africa that cost the rugby authorities several thousands of pounds, the local authorities several tens of thousands of pounds and Mr. Peter Hain absolutely nothing except the cost of his train fare? As Mr. Peter Hain set out with the intention of disruption, will my right hon. Friend comment on whether people like him

should be forced to pay for some of the disruption that they cause?

Mr. Whitelaw: One gets into difficult country when one starts arguing about who should pay. We should all accept that when we put a major responsibility on the police in a given area they are employed there and not in other areas where many of us feel that they would be of more use.

Mr. Merlyn Rees: Accepting the universal view that the right to demonstrate is vital in this country, does the right hon. Gentleman agree that in the march that has been referred to 4,000 policemen were employed who need not have been? It was a judgment that quite properly had to be taken, just in case. If all marches were carried out in the way that this one was, there would be no need for 4,000 policemen.

Mr. Whitelaw: Like myself, the right hon. Gentleman has had considerable responsibility in this area. He appreciates that the Commissioner has to make a judgment. He will be the first to agree that the Commissioner cannot afford to take any risks. He must provide the police in case something goes wrong.

Chief Constables

Mr. Allan Roberts: asked the Secretary of State for the Home Department if he is satisfied with the manner in which chief constables carry out their duties under the Police Act 1964; and whether he has any proposals to change the powers vested in chief constables under this legislation.

Mr. Whitelaw: I am satisfied as to the efficiency of the police forces in England and Wales and their chief constables and I believe that the functions assigned by the Police Act 1964 to chief constables remain appropriate.

Mr. Roberts: Is the Home Secretary aware of the growing concern about how remote chief constables are becoming from the people whom they serve? There is particular concern about the fact that they seem accountable to nobody—neither to the Home Secretary nor to their police authority. Concern is being expressed that they are entering the political arena, making political speeches and even becoming cult figures of the Right.

Mr. Whitelaw: It would represent a major change in the policy of the country if chief constables were in any way responsible to the Home Secretary. That would bring us close to having a national police force, which I believe the House would strongly resist. It would also interfere with local operational control, which would be unsatisfactory. Chief constables are responsible in their areas for the operational control and direction of their forces. Of course, they are generally accountable to their police authorities for the efficiency of their operations. Whether or not I agree with their comments, I believe that chief constables are entitled to make them from their own experience. I read them and listen to them, but I do not have to accept them.

Mr. Alexander W. Lyon: As the police authority for London, will the Home Secretary take a close personal interest in Operation Countryman? There are serious reports that the corruption and
criminality of some officers is being concealed by senior officers. That is a worrying situation for any law-abiding citizen.

Mr. Whitelaw: The short answer to the hon. Gentleman is "Yes, Sir".

Television Licence Fees

Mr. Edwin Wainwright: asked the Secretary of State for the Home Department if, in view of the increase in the television licence fee, he will now take action greatly to reduce the amount charged to senior citizens.

Mr. Brittan: No, Sir.

Mr. Wainwright: Does the Minister realise that the granting of free television licences to elderly people living in homes under varying housing accommodation complexes is causing enmity and jealousy between them and other elderly people who live close by and who have to pay the full £34. Surely that is unfair and unjust. Will the Minister reduce the price and make it more reasonable for senior citizens?

Mr. Brittan: I realise that the existence of the old persons' home licence causes feelings of resentment among those who feel that they are in a broadly comparable position. However. I know that the hon. Gentleman would not want it

to be taken away. The cost of providing free television licences for all pensioner households would be between £145 million and £160 million. I do not know whether hon. Members who argue for that would wish it to be raised by an increase in taxation or by putting up the colour television licence to £50, which is what would be required.

Mr. Chapman: Will my hon. and learned Friend look sympathetically at the proposition that the deaf should get a concession on television licences?

Mr. Brittan: I will look into that matter.

Mr. Winnick: Why do the Government hand out substantial sums of money to the richest members of the community and yet deny to pensioners who live in their own homes an elementary form of justice, namely, that they should not have to pay on a small income the same amount for the television licence fee as the rest of the community pays?

Mr. Brittan: I do not accept that the parallel the hon. Gentleman seeks to draw is in any way valid.

Local Radio Station, Ayr

Mr. Foulkes: asked the Secretary of State for the Home Department what representations he has had on his proposal to establish an independent local radio station in Ayr.

The Minister of State, Home Office (Mr. Timothy Raison): The hon. Gentleman will be aware that my right hon. Friend announced his approval in principle of further local radio stations, including an independent local radio station in Ayr, on 15 November. Before reaching that decision we received expressions of general support for the Ayr proposal from the Scottish National Party, the Scottish Education Department, three district councils in the area and from the hon. Gentleman himself.

Mr. Foulkes: You have my support for the establishment of a radio station in Ayr. I wonder if you could indicate—[Interruption.] I apologise, Mr. Speaker. Will the Minister ensure that the transmitter for the radio station is positioned so that all parts of South Ayrshire receive the signal from Radio Ayr? Radio Clyde is received in the north of the county


but not in the south. It is imperative that the new transmitter signal is received in the south of the county.

Mr. Raison: I am sure, Mr. Speaker, that you and I are both grateful for the hon. Gentleman's thanks. It is primarily a matter for the IBA to decide on the positioning of the transmitter. However, we shall certainly look into the matter.

Partly Suspended Sentences

Mr. Fletcher-Cooke: asked the Secretary of State for the Home Department if he will bring into operation the power of the courts to impose partly suspended sentences of imprisonment under section 47 of the Criminal Law Act 1977.

Mr. Brittan: We propose to consider this further in the light of the progress which I hope to see made in reducing the prison population following the May committee's report.

Mr. Fletcher-Cooke: What is the difficulty in bringing this measure in immediately? Would it not be a useful, if minor, way of reducing the prison population, and is it not a weapon that the judges want?

Mr. Brittan: I am in favour of the provision in principle, and I hope that it will be possible to introduce it. The difficulty in introducing the measure immediately is that it is difficult to know the impact that it would have on the prison population. Even if accurate forecasts of the overall impact cannot be obtained, there is reason to believe that it would increase the number of prisoners detained for short periods. Therefore, it is wise to examine the May report recommendations before implementing the proposals, which I fully support.

Mr. Edward Lyons: Is the Minister aware that this provision became law as a result of a weak Labour Government's capitulation to a Conservative new clause in Committee and that I was the only member of the Committee who opposed the alleged reform? Is it not right to say that the only effect of bringing this into law, and the reason why it has so far not been brought into law, is that it will further overcrowd our overcrowded prisons, and would be a retrograde step from the point of view of any penal reform?

Mr. Brittan: I do not accept that view either of the consequences or of the history of this provision. I regard the provision rather as the view of a Committee of the House which, even in the last Parliament, was wise enough to accept and endorse the recommendations put forward by my hon. Friends.

Mr. Lawrence: How soon may we expect the Government to increase the powers of the juvenile courts to deal with persistent juvenile offenders by amending the Children and Young Persons Act 1969, as promised?

Mr. Brittan: It will be done, but I am afraid that we cannot do it this Session.

Civil Defence Corps

Sir Nigel Fisher: asked the Secretary of State for the Home Department if he will reconstitute the Civil Defence Corps.

Mr. Raison: We have no such intention at present.

Sir N. Fisher: Does my hon. Friend agree that, if reconstituted, the corps could help in the event of a non-nuclear war, and could also help to maintain the necessities of life, such as food, water and fuel, in the event of disruptive industrial action?

Mr. Raison: It is important not to confuse the organised training and use of volunteers and civil defence for war emergencies with contingency planning to protect the public against the effects of strikes. Those are different matters.

Immigration Rules

Mr. Hooley: asked the Secretary of State for the Home Department if he will arrange for a sample census in each region of England and Wales to ascertain how many daughters of parents of British nationality were born outside the United Kingdom.

Mr. Raison: No, Sir.

Mr. Hooley: Is the Minister aware that many British Service men whose children were born abroad because they were serving abroad, other public servants whose children were born abroad because their service took them abroad, and


many other catgories of people, are deeply dismayed and resentful at the immigration rules proposed by the Government? Will he take steps to cut out from those rules the sexist and racist discriminatory elements in them?

Mr. Raison: As was indicated in the debate on 4 December, the Government have agreed to a change in their proposals for girls born overseas to parents who happened to be abroad at the time. They will be able to bring in their husbands or fiances provided that the main purpose of the marriage is not the immigration of the husband, and provided that the woman is a citizen of the United Kingdom and Colonies, one of whose parents was born here. In other cases we shall, of course, consider the circumstances very carefully and contemplate whether to exercise discretion.

Mr. Budgen: Does not my hon. Friend agree that more generous support should be given to the idea of the hon. Member for Sheffield, Heeley (Mr. Hooley) who is trying to discover the number of people involved? Is not that exactly the theory behind the register to which the Tory Party is committed in its election manifesto?

Mr. Raison: My hon. Friend is raising another question.

Mr. Alexander W. Lyon: Has the Minister looked at the figures that were produced from the 1971 census, which indicate that about half of the Indian girls in this country of marriageable age were born here? If the Minister went over to the only sensible defence of this proposal—I doubt whether even that is sensible—and if he were to restrict entry to husbands of patrial wives, would not he actually achieve all that he desires?

Mr. Raison: I have, of course, looked at the figures given in the 1971 census. I accept that point. At that time there were in Great Britain about 267,000 females, 141,000 of them single, who had been born outside the United Kingdom, but one or both of whose parents had been born in the British Isles. Not all of them will necessarily be citizens of the United Kingdom and Colonies.

Mr. Chapman: With respect, will my hon. Friend consider the answer that he gave to the hon. Member for Sheffield,

Heeley (Mr. Hooley)? Is not this the kind of question that it would be relevant and useful to answer in the decennial census in 1981?

Mr. Raison: There are some difficulties about the proposed questions covering the origin of people to be tested by the 1980–81 census. We are thinking about that very carefully.

Mr. George Cunningham: When does the Minister expect the new revised rules to be put before the House? In view of the extreme criticisms mounted from all quarters in the House on some aspects of the draft rules in the White Paper, may we have an assurance that the text of the revised regulations will be available to the House before the rules are tabled?

Mr. Raison: No, Sir.

Her Majesty's Prison, Liverpool

Mr. Heffer: asked the Secretary of State for the Home Department what discussions he has held with the Prison Officers' Association regarding outstanding problems at Her Majesty's Prison at Liverpool, Hornby Road.

Mr. Whitelaw: I understand that, following the special delegate conference held last week by the Prison Officers Association, the national executive of the association will be making approaches on a number of issues arising from the May committee's report, including the Liverpool claim, and discussions will then be arranged as soon as practicable.

Mr. Heffer: May I welcome the statement made by the Home Secretary? As there is a real problem in Liverpool prison, within the overall problem, may I thank the right hon. Gentleman for giving me that reply?

Mr. Whitelaw: If I may respond in the same manner to the hon. Gentleman, he has been particularly helpful over the problems in that prison. I am very grateful for his co-operation in seeking to solve them sensibly in the future.

Mr. McQuarrie: Will my right hon. Friend consider having discussions with his right hon. Friend the Secretary of State for Scotland in connection with the May report?

Mr. Speaker: Order. The hon. Gentleman should be careful, as the subject of the question is Liverpool.

Mr. Kilroy-Silk: Can the Home Secretary say why he is continuing to allow prison officers to deny the legal right of free access by Mr. Rod Morganat, a member of the board of visitors, to Pucklechurch remand centre, and why he is insisting on the resignation of Jonathan Pollitzer and Kay Douglas-Scott as voluntary workers at Wormwood Scrubs?

Mr. Speaker: Order. The hon. Gentleman is in the same category as the hon. Member for Aberdeenshire, East (Mr. McQuarrie). The question is about Liverpool prison.

Mr. Kilroy-Silk: On a point of order, Mr. Speaker.

Mr. Speaker: Points of order are taken after questions.

Mr. Eldon Griffiths: rose—

Mr. Kilroy-Silk: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I remind the hon. Gentleman that he is taking up Question Time. I understood that he was asking a question about Pucklechurch. We were dealing with Hornby Road, Liverpool. The question was about the standing problems of Liverpool.

Southall (Disturbance)

Mr. Bidwell: asked the Secretary of State for the Home Department what representations he has received about the Southall events during April since he made his last statement to the House; and if he will now consider a public judicial inquiry.

Mr. Whitelaw: Since my statement on 27 June I have received representations from some 40 hon. Members and 143 individuals or organisations, including the national executive committee of the Labour Party and the Trades Union Congress.
As I said on 23 October in reply to a question from the hon. Member for Salford, East (Mr. Allaun), it would be inappropriate for me to intervene or comment until the coroner's inquest into the death of Mr. Peach has been completed

and any consequent decisions about further statutory or judicial action have been made.

Mr. Bidwell: I thank the right hon. Gentleman for that reply. As it seems that the position is still wide open, pending the completion of the coroner's inquest on the death of Mr. Blair Peach, does he agree that there is still considerable, widespread concern and a determination in most quarters to ensure that such an event never occurs again? Has he under active consideration the proposals of the Ealing community relations council which is seeking to write into the Public Order Act references to the Race Relations Act, which prevents a meeting from taking place at election time which has the intention of stirring up race hatred?

Mr. Whitelaw: In answer to the hon. Gentleman, whose interest and concern in, and help with, this matter has been considerable, may I say, first, that I should not wish to comment on anything to do with a review of the public order legislation. It is important that we should examine the problems and the representations made in that context. Of course I appreciate that there is concern, and I understand the problems, but it would be inappropriate for me to comment before the completion of the judicial proceedings.

Mr. Eldon Griffiths: Does my right hon. Friend agree that one representation of the events in Southall that did no good to anyone was the BBC's "Open Door" programme, which contained some totally mendacious allegations against those who could not answer back? I accept that my right hon. Friend has no responsibility for the content of television programmes, but does he agree that it is no part of the BBC's charter to make unfounded allegations against those who are unable to reply?

Mr. Whitelaw: My hon. Friend will appreciate that I must not comment on BBC programmes. I can, however, say this. I understand that the principle of the "Open Door" series, organised by the BBC, is that people on both sides of any controversy can produce and put forward their own programmes. Those who wish to argue a particular case can do so on that programme.

Mr. George Cunningham: While fully accepting that the Secretary of State will not want to say much before the result of the inquest is known, may I again appeal to him not to close his mind to the possibility of a public inquiry on this issue? This could be as much in the interests of the police as of other people.

Mr. Whitelaw: The essence of not making any comment until after judicial proceedings have been completed is not to make any comment until they have been completed.

Mr. Jessel: While both the National Front and the Anti-Nazi League acted provocatively in April, are they not as bad as each other? Do we really need another public judicial inquiry to show that both these bodies have some responsibility for the fact that this episode ended in tears?

Mr. Whitelaw: I told the hon. Member for Southall (Mr. Bidwell) that I will not comment, and I must make the same reply to my hon. Friend.

Chief Constables

Mr. Straw: asked the Secretary of State for the Home Department if he is satisfied with the present powers and duties of chief constables and police authorities.

Mr. Whitelaw: Yes, Sir. I believe that the Police Act 1964 continues to provide the right framework.

Mr. Straw: Is the Home Secretary aware that when his predecessor, Henry Brooke, introduced the Police Bill in 1963 he said that its aim was to make chief constables fully accountable for what they did. In practice, this has not worked. There is now an unsatisfactory relationship between some police authorities and their chief constables. Will the Home Secretary look carefully at the Police Authorities (Powers) Bill that I am sponsoring in the House? It aims to give police authorities more power in respect of general policing policies, without interfering with the rightful discretion of chief constables over day-to-day operational matters.

Mr. Whitelaw: I am grateful to the hon. Gentleman for his last remarks. The operational independence of chief constables is extremely important. It is a

principle that I hope the House will fully support. There are, of course, arguments about the relationship between chief constables and police authorities. Arguments in our national life, at all levels and in many different fields, are not unusual. Arguments in this field are equally not unusual. I should not wish to change the present procedure which, on balance, works well throughout the country.

Mr. Thompson: I thank my right hon. Friend for his interest and concern in the matter in the past, but is he sure that the West Yorkshire police authority has sufficient powers and resources to catch the Yorkshire Ripper?

Mr. Whitelaw: That is basically a matter for the operational control of the chief constable of West Yorkshire. I visited the West Yorkshire police recently and spoke to the chief constable and the chairman of the police authority. On their own initiative they asked someone from the Metropolitan Police to investigate the situation. I fully support the work that they are doing. I looked into their work and saw what they were doing. The House can only hope that their considerable efforts will lead to some success.

Mr. Meacher: Is not the right hon. Gentleman disturbed at the recent remark of Mr. James Anderton, the chief constable of the Manchester area, that he so disapproves of the Sex Discrimination Act that, if necessary, he would disobey it? Contrary to what Mr. Anderton says, does the right hon. Gentleman agree that extending the powers of police authorities is in no way seeking political control over the police but is, rather, seeking democratic accountability of the police, including chief officers, which at present is almost wholly lacking?

Mr. Whitelaw: I do not accept that the accountability of chief constables to their police authorities is wholly lacking. As regards the comments of particular chief constables, I would only say this: thank goodness it is a matter for which I am not responsible and on which I do not have to reply.

Mr. Kilroy-Silk: Will the right hon. Gentleman say why he appears to have rejected out of hand guidelines for improved disciplinary procedures for chief


officers put forward by his immediate predecessor?

Mr. Whitelaw: I do not think that I have done so.

Independent Broadcasting Authority

Mr. Whitehead: asked the Secretary of State for the Home Department when he expects to meet the chairman of the Independent Broadcasting Authority.

Mr. Whitelaw: I met the chairman of the authority on Monday 3 December. I have no immediate plans for a further meeting.

Mr. Whitehead: When the right hon. Gentleman next meets the chairman of the authority, will he tell him that if there is a divergence between the views that the right hon. Gentleman expressed at Cambridge about the shape of the fourth television channel and those now being put out by the IBA, it is the view originally expressed by the right hon. Gentleman that should prevail.

Mr. Whitelaw: It would be rather absurd if, at this stage, I were to renege on my views. I have no intention of doing so.

PRIME MINISTER (ENGAGEMENTS)

Mr. Robert Atkins: asked the Prime Minister if she will list her official engagements for Thursday 13 December.

The Prime Minister (Mrs. Margaret Thatcher): This morning I was present at the departure of President Tolbert of Liberia and later presided at a meeting of the Cabinet. In addition to duties in this House, I shall be having further meetings with ministerial colleagues and others.

Mr. Atkins: Has my right hon. Friend found time to read the opinion poll in yesterday's issue of The Sun, which shows that 67 per cent. of all trade unionists and 61 per cent. of Labour trade unionists support the modest proposals in the Government's Employment Bill? Who does she think that Mr. Len Murray and the Labour Party are representing in their hysterical opposition to these proposals?

The Prime Minister: I am satisfied that in bringing forward these modest measures

of trade union legislation the Government are representing the overwhelming majority of people and trade unionists, and long may that remain so.

Mr. Armstrong: Will the Prime Minister give urgent attention today to the grave situation developing in the Northern region, particularly in County Durham, as a result of the announcement of the steel closure at Consett? Is she aware that what really amounts to the destruction of the fabric of community life that has been built up over 100 years is producing cynicism and despair the like of which I have not known since the 'thirties?
Will the right hon. Lady have a word with her right hon. Friend the Secretary of State for Industry and explain that his indifference and callous disregard for the human consequences exemplified by his saying that this is a matter for industrialists and not for the Government, are provoking those who are normally law-abiding citizens to react in a way that will have grave consequences?

The Prime Minister: I appreciate that the right hon. Gentleman is very concerned, but, as he knows, we cannot sell the steel that we are producing at the price and quality at which we are producing it. I appreciate that any closure will cause grave concern in his area, but I must ask him to pursue the matter with the British Steel Corporation.

Mr. John Wells: Is the Prime Minister aware that many of my hon. Friends will be disappointed that she has answered question Q1 on its own? [Hon. Members: "Reading".] I have to read, because I had to jot down the numbers. There are many questions on the Order Paper today, such as question Q10, which have bright original thinking behind them. The rest of the stuff asks my right hon. Friend what she is doing today. She has told us. Will she therefore, please take steps to answer questions Q3, Q10, Q14, Q17, Q27, Q28, Q30, Q31, Q34, Q36, Q38 and Q40? They total only 12 out of the 41 listed. In particular, will she answer question Q10?

The Prime Minister: I assure my hon. Friend that I would welcome some variety in the questions. I am not responsible for the questions; only for the answers. I must tell my hon. Friend


that I have never transferred an oral question. If he can get nearer to the top of the list, good luck to him.

Mr. Roy Hughes: Now that we are approaching the festive season, will the Prime Minister say whether she will be sending out her Christmas cards today? Will they bear the inscription "A Merry Christmas and an Idle New Year"? That will be the fate of many people in South Wales as a result of the policies of her Government towards the steel industry.

The Prime Minister: With regard to the first part of the hon. Gentleman's question, I hope that some of the cards have already gone. We shall be very behind hand if they have not.
With regard to the BSC plans for closures, the hon. Gentleman knows that steel is being over-produced and that in spite of massive investment in our steel industry by successive Governments we lost a large part of the share of our home market because we were not sufficiently efficient. No Government can carry on keeping many loss-making industries in being. The question of closures is one which has been long overdue. Particular closures must be taken up with the BSC.

Mr. Marlow: asked the Prime Minister whether she will list her official engagements for 13 December.

The Prime Minister: I refer my hon. Friend to the reply that I gave a moment ago.

Mr. Marlow: I wonder whether my right hon. Friend will have time today to look at the report on page 4 of The Times that Southwark council has decided not to go ahead with its extravagant proposal for building a town hall. Would she like to add her congratulations to the council and pass the same message on to other local authorities with similarly extravagant plans? Will she also comment on the gin palace and swimming baths that it is intended to put across the road at a time of economic difficulties?

The Prime Minister: I am sure that Southwark council was wise not to embark on that expensive capital project at the present time.
I think that my hon. Friend was referring in the second part of his question to the proposed new parliamentary building

which would involve expenditure in excess of £100 million. There is no possibility of that going ahead at present. We cannot ask other people to take on burdens unless we are also prepared to carry burdens.

Mr. James Callaghan: I must press the right hon. Lady on the social and economic effects of the closures that are taking place as a result of the failure to sell steel. Do the Government accept any responsibility for the welfare of the areas involved? Is the right hon. Lady aware of the devastation that will be caused? Apart from hon. Members taking up individual closures with the BSC, what are the Government's policy and attitude towards thousands of coal miners and steel workers who will be thrown out of work and will see no prospect of getting any other job?

The Prime Minister: As the right hon. Gentleman knows, we tried to carry out some remedial measures at Shotton and made it a special development area. We accept that there will have to be remedial measures in the other areas, but I do not see any possibility of obviating the need for some closures. The BSC poured a great deal of investment into the steel industry, but it has lost a large share of the home market. The way to get back that market is to reduce restrictive practices and to operate the new equipment and machinery as efficiently as possible.

Mr. Callaghan: That is not an answer to the question that I asked. I repeat it. What social responsibility do the Government accept for the fact that areas such as South Wales and, to some extent, Durham are to be plunged into heavier unemployment than we have seen since the 1930s? It is no use saying that there must be negotiations with BSC. Do the Government intend to take any measures to see that those men have an opportunity to get back to work?

The Prime Minister: I dealt with that at the beginning of my reply to the right hon. Gentleman's previous question. We expect that there will have to be remedial measures in those areas, but the sooner that we can get out of loss-making industries and have the possibility of turning over to new, expanding businesses, the better. The first stage is to get out of the loss-making industries.


If the right hon. Gentleman and his Government had faced the realities earlier, we should have been in a better position today.

Mr. Callaghan: I am not sure what the Prime Minister means by that last remark, because in my constituency more than 3,000 men lost their jobs as a result of a steel closure that took place in an attempt to deal with the matter in a regulated way, rather than by the sort of surgery and butchery that is taking place at present.
I re-emphasise that the Government will be held responsible for the failure of South Wales to secure jobs. It is a responsibility which I ask the right hon. Lady to accept. She cannot leave it at the fact that one industry is closing and the Government are just washing their hands of it. They must intervene directly.

The Prime Minister: I say again that the Government accept that certain remedial measures will be needed, but the right hon. Gentleman is the last person to ask me to take responsibility for the steel losses of the past five years.

Mr. Heddle: Will my right hon. Friend find time during her busy day to reflect on the decision taken on Tuesday by the National Union of Students to organise a national squatting campaign against the proposed Housing Bill? Does she agree that the short hold provisions in the Bill will produce rented accommodation and not cause the drying up of private rented accommodation which resulted from the previous Government's Housing Act?

The Prime Minister: The new short hold provisions are designed, as my hon. Friend says, to bring more rented accommodation on to the market. The sooner that we can get the Bill introduced and passed, the better.

Mr. Alton: Will the right hon. Lady find time today to discuss with the Home Secretary the case of Gias Uddin, the 18year-old waiter, who, it was decided yesterday, should suffer immediate deportation? Will she consider the representations made to her by the Archbishop and Bishop of Liverpool and the further representations of Merseyside Members and my right hon. Friend the Member for

Roxburgh, Selkirk and Peebles (Mr. Steel)?

The Prime Minister: That is a matter for my right hon. Friend the Home Secretary, who has heard what the hon. Gentleman has said. Representations must be made to my right hon. Friend, who has just finished answering questions.

ORGANISED RELIGIONS

Mr. Stoddart: asked the Prime Minister if she intends to meet representatives of organised religions.

The Prime Minister: I have already met representatives of a number of denominations, and hope to continue to do so.

Mr. Stoddart: In that case, the right hon. Lady will be aware that the Churches are extremely worried about the damage that education cuts will cause to children and their futures, and that Roman Catholics are fearful about the closures of their schools as the result of transport cuts provided for in the Education (No. 2) Bill.
Will the Prime Minister, as an act of Christian charity, instruct that no further progress should take place on that Bill? Is she aware that praising the Lord on Sunday and clobbering his little children during the rest of the week is no good?

The Prime Minister: I am aware of the representations on this matter. Local authorities often give priority to the transport needs of Roman Catholic children in particular, sending them to schools well outside the 3-mile statutory limit. That depends not upon any legal provision but on the policy decisions of the local authority. I have no reason to think that they will be any less generous now. Church schools were part of the 1944 Act religious settlement, and I think that they are extremely good schools.

Mr. Latham: Will my right on. Friend confirm that she recently met the leaders of the British Council of Churches, who, as I know from experience, are not tremendous supporters of the Conservative Party, that she had a very good meeting and that she twice asked them to come again?

The Prime Minister: I have met a number of religious leaders and today is


the first time that I have heard anyone suggest that Christianity is confined to one party. I refer not to my hon. Friend the Member for Melton (Mr. Latham) but to the hon. Member for Swindon (Mr. Stoddart).

Mr. Maxton: In view of reports that schools in deprived areas of Glasgow are having to ask schools in better parts of the city for clothing for their children, will the Prime Minister consult the Churches on how they are to take up again their nineteenth century role of giving charity to the poor, in order to make up for the deprivation that will result from the Government's economic policies?

The Prime Minister: It seems that we are having a theological session. To me, Christianity and theology depend not so much on collective action, as on what individuals are prepared to do themselves.

Mr. Stoddart: That is not what Christ said.

Mr. Alan Clark: Has my right hon. Friend noticed the tendency of the British Council of Churches to make off-the-cuff remarks about such highly secular topics as the entry of fiances and the siting of nuclear missiles? Does she agree that the historic duties of members of the Christian priesthood are to devote themselves to the redemption of the soul and not to seek to determine the date on which such pleasures may fall due?

The Prime Minister: I shall have to offer this quarter of an hour to the noble Lord the Archbishop of Canterbury. He could probably answer the questions better than I. I am aware that some of the Churches' resolutions have hit out at nuclear weapons and various other things, but I hope that many of them will remember that those weapons are designed to protect freedom of speech and freedom of religious worship in this country.

BUSINESS OF THE HOUSE

Mr. Speaker: Business Statement—Mr. Chancellor of the Duchy of Lancaster.

Mr. James Callaghan: In addition to any religious answers that the Lord Privy Seal might care to give, would the Leader of the House care to state the business for next week?

The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): I shall pass the right hon. Gentleman's comment on to my right hon. Friend. The business for next week will be as follows: 
Monday 17 DECEMBER—Second Reading of the Employment Bill.
Motions on the Pneumoconiosis Etc. (Workers Compensation) (Payment of Claims) Regulations and on the Water Charges Equalisation Order.
Tuesday 18 DECEMBER—Proceedings on the Consolidated Fund Bill.
Wednesday 19 DECEMBER—Second Reading of the Health Services Bill.
Motions on the Passenger and Goods Vehicle (Recording Equipment) Regulations, and on EEC document 5247/79 on units of measurement.
Thursday 20 DECEMBER—Second Reading of the Social Security Bill.
Remaining stages of the Protection of Trading Interests Bill.
Friday 21 DECEMBER—It will be proposed that the House should rise for the Christmas Adjournment until Monday 14 January 1980.
[EEC Document 5247/79
Relevant Report of the European Legislation Committee 20th Report, Session 1978–79
H/C Paper No. 10-xx 1978–79 Para. 2]

Mr. Palmer: Will the Leader of the House tell us when we can expect a statement on the expansion of the civil nuclear power programme? It is particularly urgent, in view of the inability of the Government to maintain the secrecy of their Cabinet papers.

Mr. St. John-Stevas: I shall pass on the hon. Gentleman's request to my right hon. Friend the Secretary of State for Energy.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. I remind the House that I have an exceedingly long list of hon. Members with steel constituency interests who hope to take part in the major debate today. Before that there is a statement that, I gather, is also of considerable interest to the House. Therefore, I propose not to go as long on business questions for next week.

Mr. John Wells: Will my right hon. Friend give us some assurance that the excessive number of members of the public wandering round the Palace of Westminster, particularly those parts that are theoretically reserved for Members only, will be substantially reduced in the new year if it cannot be done next week? Will he also make sure that the definition of an Officer of the House is reconsidered? It seems to me and to many of my hon. Friends that far too many people think that they have some extension of public duty, and we could well do without them on this side of Westminster Bridge Road. Let them stay in Norman Shaw South or North.

Mr. St. John-Stevas: I shall certainly consider what my hon. Friend said, but it has long been the tradition of this House that there should be as free access as possible for members of the public.

Mr. Molyneaux: Can the Leader of the House indicate when we may expect to debate the motion for the Adjournment for the Christmas Recess?

Mr. St. John-Stevas: The recess motion will be taken on Tuesday 18 December.

Mr. Marks: The House has not yet approved the rate support grant or rate support increase orders. When will we have an opportunity to debate those orders?

Mr. St. John-Stevas: I am afraid that I cannot find time to debate those orders before the Christmas Recess, but I hope that we shall do so soon after we return.

Mr. Adley: I did not hear my right hon. Friend say anything about an announcement on airports policy. I understood that the Government were to make some sort of announcement about what is called the third London airport—which many of us feel is not necessary—before Christmas. Can my right hon. Friend

tell me whether the timetable has now been changed, and will he give us an assurance that this matter will not be dealt with by means of a written answer?

Mr. St. John-Stevas: Yes, of course I can give my hon. Friend the assurance that a matter of this importance will not be dealt with by a written answer. The Government hope that it will be possible to make a statement on general airports policy next week.

Mr. Harry Ewing: I wish to ask the Leader of the House a question about next week's business, and every week's business for that matter, particularly in relation to Scotland. Is the right hon. Gentleman aware that for the second time this week the Scottish Office has published consultative documents—one on the Health Service and one, today, on the assisted places scheme in Scotland—without making those documents available in the House of Commons, either in the Vote Office or the Library? That kind of treatment is intolerable, particularly in view of the fact that last week we had to kick up a row before the Housing Bill was put in the Vote Office. In order to save the Leader of the House further trouble, will he take up this matter with the Scottish Office and make sure that it does not happen again? I can assure the right hon. Gentleman that we shall disrupt Scottish business unless something is done about this serious state of affairs.

Mr. St. John-Stevas: I am not familiar with the facts raised by the hon. Gentleman, but I shall certainly look into them and have discussions later today with my right hon. Friend the Secretary of State for Scotland.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. I propose to call the hon. Gentleman who has been rising in his place on the Government Benches and five other hon. Members, which I think will give a fair crack of the whip in view of all the business that is to follow.

Mr. Cormack: Will my right hon. Friend confirm that there will be an early debate on the proposals for the new parliamentary building? Will he take this opportunity to confirm that there is no proposal to spend an immediate sum in excess of £100 million, that this scheme


has been carefully looked into by the Services Committee, and that it is a phased development? Will he also confirm that the Government have not yet made up their mind?

Mr. St. John-Stevas: From what the Prime Minister said I gathered that it was not a question of not having £120 million but that there was no money available at the moment for this building. However, it is right that the House should have a reasonably early opportunity to debate the subject. We must have an opportunity to decide on a matter that affects the future of the House, and I shall be guided in this matter by the wishes of right hon. and hon. Members.

Mrs. Renée Short: Does the right hon. Gentleman recall that twice recently at business questions I have raised with him the urgent need to debate the Royal Commission's report on the National Health Service? Why is he putting forward a Bill next week on the National Health Service when that report has not been debated? Will he change the business for next week so that we have the debate on the Royal Commission Report then and the Bill after Christmas?

Mr. St. John-Stevas: There is a lot to be said in theory for the course advocated by the hon. Lady. But I am afraid that even to oblige the hon. Lady—which I would greatly like to do—I cannot get in a debate on the National Health Service next week.

Mr. Kaufman: Has the right hon. Gentleman seen early-day motion 249 on the Secretary of State for Industry, which has now been signed by 180 right hon. and hon. Members of the House?
[That this House, recalling the statements by the Secretary of State for Industry in relation to the resignation of the National Enterprise Board: 'I had had only one meeting privately with the chairman of Rolls-Royce'(Official Report, 21st November, column 392) and the decision of the Rolls-Royce board to resign if it were left under the supervision of the NEB'(Official Report, 26th November, column 977), and bearing in mind the statement by the Prime Minister: 'I never knew my right honourable Friend the Secretary of State for Industry to mislead anybody'(Official Report, 27th November, column 1104) now finds

that in his two statements quoted above the Secretary of State for Industry seriously and culpably misled the House as confirmed by his statements to Standing Committee E on 27th November: 'the three occasions on which I met Sir Kenneth Keith without having warned Sir Leslie Murphy that I was going to do so' (column 165) and 'On the one hand, I had been categorically told by Sir Leslie Murphy and his colleagues that if the Government carried out their proposed intentions, they would all resign; there was no doubt about that. On the other hand, I have had no such explicit assurance from all the members of the Rolls-Royce board' (column 168), accordingly calls upon the Prime Minister to dismiss the Secretary of State for Industry.]
In view of the serious implications of that motion, will he arrange for either the Prime Minister or the Secretary of State to make a statement before the House rises for the Christmas Recess?

Mr. St. John-Stevas: I shall certainly pass on that request to my right hon. Friend.

Mr. Rooker: Will the Leader of the House arrange for the Prime Minister to make an early statement about the allocation of ministerial duties to the Minister of State at the Treasury, in view of the House of Lords decision this morning in the Rossminster case?

Mr. St. John-Stevas: I do not understand the implication of the hon. Gentleman's question.

Mr. Arthur Davidson: Will the Leader of the House oblige me and other Members for Lancashire constituencies by arranging for an early debate on the Lancashire textile industry? As he will be aware, that industry faces a serious crisis, which may get worse after the recess.

Mr. St. John-Stevas: I shall bear in mind that request when planning our programme after Christmas.

Mr. Cook: Is the right hon. Gentleman aware that the Parliament of every other country participating in the decision about which we shall shortly hear a statement has had an opportunity to debate the NATO proposals? Is he also aware that the Secretary of State for Defence has revealed outside the House that when she


goes to Washington the Prime Minister will discuss with President Carter the replacement of Polaris? In view of that, does not the right hon. Gentleman accept that it is an outrage that the House should rise for Christmas without having debated defence?

Mr. St. John-Stevas: It is not an outrage that we have not had an opportunity to debate defence, although I regret that that opportunity has not arisen. There will be a statement by the Secretary of State for Defence immediately following this business statement and hon. Members will have the opportunity to raise defence matters.

THEATRE NUCLEAR FORCES

The Secretary of State for Defence (Mr. Francis Pym): With permission, Mr. Speaker, I should like to make a statement about the NATO Foreign and Defence Ministers' meeting in Brussels yesterday. We considered proposals for modernisation of the Alliance's long-range theatre nuclear forces, and a parallel arms control offer. A copy of the communiqué issued at the end of the meeting is being placed in the Library.
Faced with the rapid growth in Soviet long-range theatre nuclear capability, notably the deployment of large numbers of modern SS20 missiles and Backfire bombers, at a time when the Alliance's own equivalent forces are increasing in age and vulnerability, we concluded that some modernisation of NATO's theatre nuclear capability is essential.
The modernisation programme will involve the deployment in Europe of United States-owned and operated systems, comprising 108 Pershing II ballistic missile launchers, which will replace the same number of the existing Pershing I As, and 464 ground-launched cruise missiles. All 14 NATO countries concerned have agreed to support the programme, and certain infrastructure costs will be met through NATO's existing common funding arrangements. As far as basing is concerned, Germany, Italy and Belgium, in addition to ourselves, have agreed to stationing, subject in the Belgian case to a six-month deferment of implementation while arms control developments are monitored. The Netherlands will take a decision in 1981 on deployment in their territory. The first deployments should take place in about three years' time.
We will discuss with the United States where the 160 cruise missiles to be deployed in the United Kingdom should be stationed. I will make a statement about this as soon as is practicable.
As an integral part of the programme, we also agreed that the United States should withdraw 1,000 of its nuclear warheads from Europe as soon as possible, and that remaining stockpiles will not be increased as the 572 warheads associated with the modernisation programme are introduced.
In parallel with this programme, the United States will make an offer to the


Soviet Union to begin negotiations on the limitation of both Soviet and United
States land-based long-range theatre nuclear systems. The intention is that their bilateral negotiations should begin as soon as possible. They will be based on the principle of equality between both sides; any limitations will have to be adequately verifiable. The aim will be to contribute to a more stable military relationship in Europe, and hence a more predictable and manageable situation at a lower level of armaments. Because of the particular importance of these negotiations for the European members of the Alliance, a special consultative body will be set up within NATO to follow the negotiations on a continuous basis.
Her Majesty's Government have, as I have earlier made clear, fully supported the Alliance effort to reach agreement on this programme, which I believe is essential if we are to avoid a dangerous gap emerging in NATO's theatre nuclear capability. Such a gap would weaken the Alliance's strategy of flexible response and so cast doubt on the credibility of our deterrent capability. The decision reached yesterday is a dramatic reaffirmation of the American commitment to the defence of Europe. This decision is also a demonstration of the cohesion and political will of the Alliance to respond to a growing Soviet threat and to resist a massive Soviet propaganda campaign. My right hon. and noble Friend the Foreign and Commonwealth Secretary and I therefore regard the outcome of the Alliance's lengthy and careful deliberations as highly satisfactory. We must now hope that the Soviet Union is now willing to negotiate seriously on the limitation of theatre nuclear systems.

Mr. Rodgers: The Secretary of State will know that the view expressed earlier by my hon. Friend the Member for Edinburgh, Central (Mr. Cook) is widely held on this side of the House. There is deep concern about the Government's failure to provide time for a debate on this most important subject before the decisions were made yesterday. The Secretary of State told the House six weeks ago that my hon. Friend had made representations about the need for a debate and we strongly supported them. It is a contempt of the House on the part

of the Goverment not to have had a debate before the meeting took place.
There are a number of specific points that I wish to raise. What is the total effect on the number of nuclear warheads deployed by NATO in Europe? The right hon. Gentleman gave a figure in his statement, and it appears that there will be a net reduction of 428. Will he confirm that? Secondly, he referred to certain infrastructure costs. Apart from these, what additional costs will fall on the United Kingdom Exchequer? Have they already been provided for, and, if not, how will they be accommodated?
Thirdly, the right hon. Gentleman mentioned that there will be consultations with the United States about location. Can he say anything further about the timetable, and who else will be consulted before these very sensitive decisions are made? Fourthly, the statement referred to United States-owned and operated systems. If these are not to be dual keyed systems, will there be any consultation process before the United States authorises their use?
Fifthly, I wish to raise a question about arms control. What is the timetable for the new United States offer? Will the Secretary of State confirm that there is no reason at all why one should not be made as part of SALT III even before SALT II is ratified? Will he recognise that there is widespread anxiety that these negotiations should begin as soon as possible?
The Secretary of State knows that the range and character of these new weapons, and particularly the SS20, represents a dangerous and significant escalation of the nuclear arms race at a cost which is becoming less and less easy to bear. In fact, the descriptions of the weapons that the right hon. Gentleman used today cast doubt on conventional nuclear theology and the distinction between types of weapons as understood in the past. He must know that there are those who strongly support NATO and accept the need to modernise its equipment from time to time but who also believe in the vital importance of arms control, disarmament by agreement and detente. The tone of many recent remarks, particularly by the Prime Minister, casts doubt on the sincerity of the Government, faced with the opportunities that are now opened up. It is plainly the


case that the right hon. Gentleman's response to Mr. Brezhnev's initiative was brusque. That view is widely shared. We very much hope that the Government will approach the new discussions in a positive spirit. I should be grateful for an unequivocal commitment in that direction.

Mr. Pym: I turn at once to the last point raised by the right hon. Member. He is misrepresenting our position. The fact is that 1,000 warheads will be taken out, and we shall not use the 572 to increase the number thereafter. For every warhead that goes in, one will be taken out, so the reduction at the end of the day will be 1,572. That is a massive response. I welcome the statement of Mr. Brezhnev, but appreciate that there are reasons to doubt his complete sincerity. We have put forward a very serious offer. The whole Alliance is keen on arms control, as are Her Majesty's Government, for at the end of the day that is the object of our defence policy—to secure our safety and freedom at the minimum cost in money and resources.
I think that I have covered the right hon. Gentleman's question about the number of nuclear warheads.
With regard to infrastructure costs, the United Kingdom will meet its share, which I understand is calculated now to be approximately £10 million. Preliminary provision has already been made for that in our future costs and estimates.
As to the timetabling of basing, I have little doubt that we shall come to a conclusion in the course of next year. I hope that it will be in the early part of next year. But there is no exact timetable. We have to go through the necessary processes.
Concerning consultation, in so far as one can consult on a matter of national security, we shall certainly consult to the maximum possible extent.
The arms control will be done essentially in the context of SALT, and it will start as soon as possible. As I said in my statement, there is no reason for any delay. We are waiting for an indication from the other side that it really means business. While we have made this offer of a reduction in warheads, we know that the number of nuclear warheads on the other side of the Iron Curtain is in-

creasing and shows every sign of increasing at the present time.

Mr. Buck: My right hon. Friend will have the congratulations of all his right hon. and hon. Friends on what has been achieved in Brussels, and on the leading part that he clearly played in the negotiations. Will he agree that perhaps the most important thing is that it will enable us to go into negotiations on the limitation of theatre nuclear systems from a position of comparative strength rather than weakness, and that this is much to be desired?

Mr. Pym: I am grateful to my hon. and learned Friend for his remarks. I am sure that the decision on increasing the missiles and modernising the weapons will have the effect in the long term of helping the arms control negotiations, and not the other way round.

M. Frank Allaun: The Secretary of State has undoubtedly worsened the prospects for negotiations and detente. Despite that, what initiative will he now take in response to Mr. Brezhnev's offer on medium-range missiles? If Russia—as I hope, and as Mr. Brezhnev offered—reduces her SS20s, will Britain forgo her cruise and Pershing missiles before deployment?

Mr. Pym: I think that the offer made by the United States through the Alliance yesterday as part of this package, to remove 1,000 warheads, is a very formidable offer, and compares—it is in quite a different category, I should have thought—with the offer made by Mr. Brezhnev at the beginning of October.
I ask the hon. Gentleman to consider this comparison. There are at the present time 600 SS20 nuclear warheads deployed or available. The SS20s programme is continuing to build up. The comparison to make is with the 572 warheads that will be brought in by the Alliance when this programme is implemented. That is quite a substantial contrast. The negotiations with the Russians on arms control and on this offer, from the point of view of the United States and the Alliance, cannot begin too soon. We shall wait now for a response from them to see whether negotiations can begin. I think that the hon. Gentleman would be fair if he recognised that this is a very positive response.

Mr. Stephen Ross: Unlike the right hon. Member for Stockton (Mr. Rodgers), I should like to make clear to the House that I, on behalf of my parliamentary colleagues, fully support the decisions taken in Brussels yesterday, as we agree that it is necessary to update and modernise the NATO theatre nuclear capability.
Will the right hon. Gentleman tell us whether a possible option on the 160 or so cruise missiles which are coming into this country might be for them to be stationed on surface ships instead of being land-based?
Will the right hon. Gentleman give us an assurance that, in view of the decisions which are likely to be taken in Washington shortly concerning our independent nuclear deterrent—over which we would have very different views from those of his own party, as we would be totally opposed to updating that—we shall be able to debate the subject and take a vote on it in this House? Or will the right hon. Gentleman present a White Paper to the House on his Government's defence policy?

Mr. Pym: I thank the hon. Gentleman for the support that he gave to the decision taken in NATO yesterday. It was taken with the agreement of all 14 member nations.
With regard to surface ships, the answer is "No". All 160 will be ground-launched.
The strategic successor system is another subject which will fall to be considered later. As my right hon. Friend the Prime Minister said the other day, the question has to be decided in the light of the national security needs. But I should be surprised if there were not time for a debate before that decision falls to be taken, which is some time within the next few months. There is no timetable for that, so I should be surprised if there were not an opportunity.

Sir Frederic Bennett: The Minister has given us a number of very helpful comparable statistics about relative strength in this area. Having mentioned the number of SS20s deployed, quite apart from the Backfire bombers, could he tell us how many such weapons within the Soviet armoury are capable at the present time of reaching targets throughout Western Europe? How many tactical nuclear weapons has the West that are

capable of reaching targets within the Soviet Union, as opposed to the unfortunate satellite countries of Eastern Europe?

Mr. Pym: On the SS20s alone, as I mentioned just now, there are no fewer than 600 warheads, which could hit any part of Europe. That is excluding the Backfire bomber. There is no question but that the nuclear capability of the Soviet Union to strike in Europe is infinitely greater than our retaliatory capacity.

Mr. Heffer: How can the right hon. Gentleman say that the peoples of NATO have agreed, when the Dutch Parliament—and I assume that we believe in Parliamentary democracy—discussed it and voted against it? The right hon. Gentleman's position is not a logical one for him to take.
Is the right hon. Gentleman aware that the Labour Party conference was overwhelmingly against these weapons being introduced? Before the Government take a final decision—although I understand that a decision has been taken—we ought to have a debate in this House, so that we can discuss this most important question, because the future of our towns, our cities and our people is at stake. The right hon. Gentleman might be prepared to accept it complacently, but many of us on the Labour Benches are not prepared to accept it.

Mr. Pym: The matter of a debate, as the hon. Gentleman knows, is not for me. The point I was making was that the Foreign Ministers and the Defence Minister meeting yesterday were all agreed on the need for this programme and supported the whole programme, the size of the programme, the production of the missiles and their deployment—subject to the reservation that the hon. Gentleman has just mentioned in the case of the Netherlands and the six months' reservation in respect of Belgium. That is the true position.

Mr. Critchley: I strongly welcome my right hon. Friend's statement. What effect will the stationing of American cruise missile systems have on the need for a Vulcan replacement? Will the eventual negotiations, to which we all look forward, be multilateral or only between the United States and the Soviet Union?

Mr. Pym: The cruise missiles and the Pershings to which I have referred will be the replacements within the Alliance of long-range theatre nuclear forces. To some extent, the Tornado programme is also a replacement for the Vulcans, but there is no intention at the moment to replace the Vulcans as such. The negotiations will be bilateral.

Mr. Cook: Is not the reality that the four countries participating in the decision have now adopted three different positions? In retrospect, after the protracted negotiations this week, would not the Secretary of State concede that the cohesion of the Alliance would have been better served if he had accepted the advice of those who urged that a commitment to deploy a weapons system which does not even exist yet should be deferred until the arms control avenue has at least been explored?

Mr. Pym: That was debated at considerable length in the meeting yesterday. The unanimous view was that it was necessary to go ahead with the modernisation programme at the same time as going ahead with the arms control negotiations.

Mr. Eldon Griffiths: Is my right hon. Friend aware that the decision reached in Brussels, together with the statement of President Carter that he is substantially increasing the American defence budget, is the best news for peace and freedom since the Soviet Union deployed the SS20 against us? I thank my right hon. Friend for his courage in giving leadership on this matter, which has brought credit to our country as a whole.

Mr. Pym: I am grateful to my hon. Friend for his remarks. It is the view of the Alliance that any other decision would have weakened the Alliance and exposed the Western world to risks that we would not have been justified in taking.

Mr. Stoddart: Will the Secretary of State accept that there are many in this country, including myself, who seriously and sincerely hold the view that the policy that he has embarked upon is completely suicidal? If these weapons were used on a first strike and second strike basis, will the right hon. Gentleman give an estimate of how many casualties there would be in Britain? Would it be 5 million, 10 million, or would we all go up in smoke together?

Mr. Pym: To use the hon. Gentleman's own words, the view taken by the Alliance was that not to take that decision could be suicidal. There is no doubt that the Soviet Union's nuclear capability could annihilate Europe. Everybody knows that there is no aggressive intention or desire anywhere in any country in Europe or anywhere in the free Western world. We have to protect our position and we felt—and we all agreed—that without that decision our protection would be inadequate and we would be failing in our duty.

Mr. Gummer: Will my right hon. Friend contrast the ambivalent attitude taken by the Opposition Front Bench with the decision last week by the Suffolk Labour Party to oppose not only all nuclear weapons but the stationing of cruise missiles in Suffolk? Will he go out of his way to explain to the people of Britain that only by being properly defended can we ensure that our children live in freedom?

Mr. Pym: I have done my best—almost every week, somewhere in the country—to set out the rationale and the arguments for the nuclear case. Like us all, I should like to be without them altogether, but it takes both sides to achieve that. It is
important that the reason for this policy is understood by the public. In the last two or three months I have been doing my best to try to present that policy.
As I said in my statement, there is no decision about basing. I know that there has been concern in East Anglia, and I understand that. However, there has been no decision even to base any of the ground-launched missiles in East Anglia. I cannot say that they will not be based there, and I cannot say that they will be; it has not yet been decided.

Mr. George: It was reported yesterday that the United States Secretary of Defence and our Secretary of State lectured their colleagues on the need for more conventional defence. If we are to commit Britain to up to £8,000 million on a Polaris replacement, will that have an effect on conventional forces? If we are to upgrade conventional forces and spend £8,000 million, what will be the total cost?

Mr. Pym: As the hon. Gentleman knows, there has been no decision about


a strategic successor system. Equally, there is a desire—and he is right about that—to maintain the level of our conventional forces. It is a corollary of a nuclear capability that the nuclear threshold is not lowered. The
higher the nuclear threshold, the better. That is very much in our minds, and it is not our intention to lower that threshold.

Mr. Rathbone: Will my right hon. Friend accept that the country will welcome this genuine step towards genuine detente? There will be some who will share the anxiety with me that the net reduction in nuclear warheads within Europe may tip the balance against NATO in a worrying way. Can he give any reassurance on that point?

Mr. Pym: Yes, I can. It has never been the intention of the Alliance to match the Soviet Union missile for missile, nor is it necessary. We must have a full range of capability enabling the Alliance to respond, if necessary, at any level. At whatever level is appropriate, there must be a capability to respond. Unless the Soviet Union makes a drastic change in its policy, there is no likelihood of reaching a position where the number of missiles and the number of warheads match each other on either side of the Iron Curtain. Presently they have more missiles than we have, and the weapons are more modern. That position will not change until the Soviet Union decides to negotiate, decides to protect itself and allows us to protect ourselves at a lower level of arms.

Mr. Ennals: Is the Secretary of State aware that in East Anglia and elsewhere there are many who have supported the NATO Alliance and the concept of deterrence who, nevertheless, are deeply disturbed by the decision taken by the NATO Ministers? They see that decision as a further escalation in the arms race, especially as the House has had no opportunity to debate the issue.

Mr. Pym: I fully appreciate the concern felt, but I hope that people will reflect on the following points. There have been hundreds of warheads in East Anglia—different numbers at different periods—and it has always been like that. The nuclear capability that has been stationed in East Anglia has been part of our deterrent capability, as it has always been. Surely there is some re-

assurance in the fact that we are to reduce the overall numbers, which means that not only will we not increase the nuclear element of our defence capability but that we will reduce it.
Those weapons will be modern and capable of doing the job that they are there to do, namely, pose the retaliatory threat—if we ever were threatened—of inflicting an unacceptable degree of damage. There should be more uneasiness if our defences were not adequate to deal with such a threat. I hope that people will be reassured by those facts.

Mr. Nelson: I welcome my right hon. Friend's statement this afternoon. Will he indicate why nearly all the cruise missiles are land-based, and why a decision has been taken against airborne launching? Will he also confirm that this welcome decision will in no way undermine the need for a full replacement of our strategic nuclear force?

Mr. Pym: After a close analysis, which lasted more than two years, it was felt that the ground-launched cruise missile offered the most effective and practical solution to the problem. The ship-launched and air-launched missiles were thought, and judged, to be more vulnerable and expensive. That was agreed, by all the countries concerned, to be the most effective way of achieving the objective.

Mr. Dalyell: The Secretary of State, in a previous incarnation on this side of the House, spent four years telling the House how concerned he was about its authority. Does the right hon. Gentleman consider that this complex subject is adequately dealt with by necessarily haphazard questions and answers? In all conscience, should there not be a serious debate?

Mr. Pym: I said some time ago that if such a debate could be arranged I would welcome it and I would be more than glad to take part in it. There are pressures on my right hon. Friend the Leader of the House, as everybody knows, especially in the first Session of a Parliament. The hon. Gentleman is entitled to say that we must provide the time for a debate, and had that time been available we should have done so. At the same time, if the hon. Gentleman and his party felt so strongly about it, they could have used some of their time—[Interruption.] I am not trying to get out from under


it. I agree with the hon. Gentleman. The nuclear strategy has not been debated in the House for some time, and I hope that there will be an opportunity to debate it before long.

Mr. James Callaghan: The Secretary of State says that he is in favour of a debate, and the responsibility lies on the Lord Privy Seal for not providing the time. [HON. MEMBERS: "The Leader of the House."] Well, whoever he is, he is overpaid. The right hon. Gentleman could provide time next week if he were to abandon the Bill on the reorganisation of the Health Service, which is not necessary next week and could be taken after the recess. Those who believe in the theory of deterrence are obviously naturally concerned with the questions that have been raised on both sides of the House about the anxieties of thousands in this country. It is important that we should have full and informed discussions. I am ready to take my part in a debate on the subject in order that people should understand the risks, dangers, and alternatives, and why we have decided in favour of this course of action.
I ask the right hon. Gentleman to avoid mischief being made. Missiles or weapons under the control of the United States are operated by the United States from this country. That is the arrangement that has existed so far. Will he give me an assurance that no decisions will be taken by the United States without the fullest consultation with and agreement of Her Majesty's Government? That seems to be the issue about which the House of Commons should be concerned when another friendly and allied Government are operating with our full consent and agreement from within our territory.

Mr. Pym: I appreciate what the right hon. Gentleman says about a debate. My right hon. Friend the Leader of the House, who has responsibility for the business of the House, has tried hard to find an opportunity to fit in such a debate. I used to have some responsibility for House of Commons business. I know the difficulties, as does the right hon. Gentleman. We would have liked a debate. It is only fair to my right hon. Friend to make that clear.
I appreciate fully what the right hon. Gentleman says about participating in a debate. It would have been helpful if he could have deployed in his own words the arguments that lead him, I have no doubt, to the same conclusions as those reached by the Government.
I think that the answer is "Yes, Sir" to the right hon. Gentleman's third question. The same arrangements for consultation will continue that have existed heretofore. The right hon. Gentleman will be even more familiar with those than I am.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. I propose to call hon. Members on both sides of the House who have been rising to ask questions. That does not include those who did so only after the Secretary of State's last answer. I hope that the House will understand that this course will mean one fewer hon. Member being called to participate in the steel debate. I hope that questions will be brief.

Mr. Wilkinson: Will my right hon. Friend tell the House the rate at which the Soviet armed forces are acquiring Tupolev 22 supersonic bombers and SS20 IRBMs? Is the NATO Alliance not merely reverting to the position in the early 1960s when it deployed both Jupiter medium-range ballistic missiles and Thors in Western Europe?

Mr. Pym: I do not think that I can give my hon. Friend the figures for the rate of the build-up. In any event. I could not do so without notice. However, we know that it continues. Unfortunately it shows every sign of continuing.

Mr. Cryer: Does the right hon. Gentleman agree that the decision not to have a debate in the House has not been taken by
an individual? Is not the agenda of this place controlled by the Cabinet? Has it not been a Cabinet decision not to put such a debate on the agenda of the House, and to deny the House a debate before the decision was taken?
Will the right hon. Gentleman confirm that only one key is involved in the use of these weapons? If another accident occurs—never mind intention—of the sort that took place on 9 November at Colorado Springs, when the right hon. Gentleman claimed that everything was all


right because the world had not been blown up, what will be the Government's attitude? Does the use of one key indicate that the Americans have the right to enjoy the use of these weapons without consultation? If there is any similar alert, the Americans may decide that there is no time for consultation in any event, so we are on our way to a radioactive cinder heap.

Mr. Pym: That is a grotesque misrepresentation of the position. The hon. Gentleman should be fair. He should pay some attention to public reassurance. What I am about to say may be rash and, first, I touch wood, but the safety record in the United Kingdom has been good. Perhaps we have been fortunate not to have an accident involving a nuclear weapon. However, I repeat that the hon. Gentleman should be fair. When he uses language of the sort that he employed in his question he is not being helpful. I agree that it is a single and not a dual key system. However, there are consultative processes that have been long established, which successive Governments have thought to be adequate in all the circumstances.
The hon. Gentleman spoke of a collective decision not to have a debate. The business of the House is a matter of priorities. The Cabinet would have been happy to have a debate on these matters. However, it has to decide what the priorities are in the House. As every hon. Member knows, there is heavy legislative pressure on the House in the first Session of any Parliament. Apart from that pressure, we have had the problems of Zimbabwe, which have taken additional days. The Cabinet did not decide not to have a debate. The Cabinet decided that time should be devoted to the business that my right hon. Friend has announced.

Mr. Burden: The right hon. Gentleman the Leader of the Opposition asked my right hon. Friend the Leader of the House for a debate. I support the right hon. Gentleman's request. I link my name with his because on Tuesday he stated that if there were a debate there would be widely varying opinions expressed by his right hon and hon. Friends. The country is entitled to know the extent of those differences.

Mr. Pym: I assure my hon. Friend that I was in touch with my right hon. Friend the Leader of the House on this issue. I am sure that the House will recognise the pressure that exists on the Government programme. To be fair to my right hon. Friend, he responded to the priorities chosen by the Cabinet.

Mr. Flannery: Is it not a fact that this is the only Parliament in Europe that has not had a debate on this subject? Does the right hon. Gentleman accept that the decision has been taken without the democratic practice being followed of debate preceding decision? It seems that the decision has been taken and that we shall not have a debate. That being so, what is the strategic thinking behind the utterly disproportionate number of cruise missiles that will come into Britain compared with the totality in the whole of Western Europe? Why are we to have 160 out of the total? That seems a disproportionate share when we compare the numbers that will be in other countries

Mr. Pym: I do not think that it is. The Federal Republic of Germany will have more if we take its Pershing and ground-launched missiles together. At present all the long-range theatre nuclear forces in Europe are in the United Kingdom. Following the decision, these missiles will be spread more widely throughout the Alliance. That is an advantage.

Mr. Kershaw: Is it not traditional in matters of foreign policy and treaties for the Government of the day to come to a decision, to convey it to the House and to ask for its approbation? Has that not always been done? Surely the Government are in line with that traditional practice.

Mr. Pym: That may be so, but there is no reason why there should not be a debate.

Mr. Norman Atkinson: Are the Crown bases in Cyprus considered to be British territory for the purpose of allocating nuclear warheads? When the right hon. Gentleman said at the conference that he could deliver the British people behind the decision that had been taken, on what authority did he come to that conclusion? What expression of public opinion led him to take that view


when all expressions so far have been opposed to the decision that led him to say that he could deliver the British people?

Mr. Pym: That is not so. If I used that phrase and if it sounded presumptuous, I apologise. I am not aware that I said anything of the sort. One takes nothing for granted and I have not done so. I have made many speeches on this issue in many parts of the country. I have tried to excite public debate on an important matter. Whatever the constitutional position may be, there is no thought of stationing any cruise missiles on Cyprus.

Mr. Robert Atkins: Does my right hon. Friend agree that the NATO plan is for defence and not attack? Does he also agree that over the years a strong defence has been proved to give us the balance of freedom that we have had since the Second World War? Will he comment on the level of public debate that there has been in Russia and in other countries in the Warsaw Pact on these matters? If yesterday's decision had not been taken, and if the Russians had continued to build weapons at their present rate, will my right hon. Friend estimate how long it would be before they again advanced ahead of us?

Mr. Pym: The essence of the policy is for the NATO Alliance to possess a retaliatory capability that would and could inflict damage upon a potential aggressor that would be totally unacceptable, thus preserving peace and preventing war in the first place.
I cannot answer the question about what would happen if the Russian missiles build-up continued at its present rate for a number of years. I cannot think what they will do with them all. I begin to wonder what they will do with them as they become out of date in due course. I hope that the Russians will dismantle them, but I am afraid that there is no answer to the question.

Mr. Douglas: Does the right hon. Gentleman accept that there is no greater priority, when we alter the balance of terror, than that we should discuss publicly in this House how we propose to adjust that balance? Will he prevail

upon his right hon. Friend the Leader of the House to make time for a debate as soon as possible?
In his reply to my right hon. Friend the Leader of the Opposition the Secretary of State said "I think" in relation to the control of these weapons in the United Kingdom. Will he re-examine the question and be absolutely sure about the method of approach to the control of the weapons? In the body of his remarks he spoke of a consultative body, which would monitor negotiations. Will he give us the terms of reference and details of the personnel in that organisation and say when and to whom they will report?

Mr. Pym: I sought to say that the control arrangements remain exactly as they are today and as they have been for many years. They apply today to the United States nuclear capabilities already deployed within the Alliance. There will be no change. Concerning the second point, the full details have not yet been worked out. As a result of the new initiative on arms control negotiations from our side and in view of the importance that I know hon. Members in this House and people in all countries attach to it the consultative body was thought to be a desirable piece of machinery to set up within NATO. It will enable countries such as Belgium, Holland and ourselves to monitor the arms control negotiations carefully over the next six months. It was thought useful to have a special body to see how matters were developing so that everyone could have a well considered assessment within the Alliance, which would allow them to take into account developments that occur.

Mr. Cryer: On a point of order, Mr. Speaker.

Mr. Speaker: We must move on. Before we take Standing Order No. 9 applications, I have two brief statements to make.

CONSOLIDATED FUND BILL

Mr. Speaker: For the debate on Tuesday 18 December on the Second Reading of the Consolidated Fund Bill hon. Members may hand into my office by 9 am on Monday 17 December their names and the topics that they wish to raise. The ballot will be carried out as on the last occasion. An hon. Member


may hand in only his own name and one topic. The Consolidated Fund Bill includes the Defence and Civil Votes on Account for 1980–81 presented in House of Commons Papers Nos. 271, 272 and 274 and the Supplementary Estimates for 1979–80 presented in House of Commons Paper Nos. 269, 270 and 304.
It will be in order on the Second Reading of the Bill to raise topics falling within the ambit of the expenditure proposed in these papers. I shall put out the results of the ballot later on 17 December.

ADJOURNMENT, 21 DECEMBER 1979

Mr. Speaker: I remind hon. Members that on the motion for the Adjournment of the House on Friday 21 December up to eight hon. Members may raise with Ministers subjects of their own choice. Applications should reach my office by 10 pm on Monday next. A ballot will be held on Tuesday morning and the result made known as soon as possible thereafter.

THEATRE NUCLEAR FORCES

Mr. Rodgers: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the action that Her Majesty's Government propose to take and the further consultations that are planned in implementing the decision of NATO Ministers to modernise theatre nuclear forces.
This does not refer generally to yesterday's meeting of NATO Ministers, Mr. Speaker, or even to the decision to deploy new nuclear weapons, but specifically to the action and consultations that are planned to implement the decision.
On importance, Mr. Speaker, there can be no argument whatever as to the widespread public discussion of the Government's action. Today's statement demonstrates that there is no doubt of the great importance attached to this matter both by the people of this country and by those who accept that the decision has been made but who have continuing doubts. As to urgency—this is the nub of the matter—the Prime Minister is

leaving for Washington this weekend. The outcome of the NATO meeting will be discussed as part of a wider exchange of views with President Carter. It is essential that the House discusses this matter before further commitments are entered into.
It is simply not good enough, Mr. Speaker, to leave these matters over until the House returns in mid-January, or even to wait a few days to discuss them. As the mood of the House this afternoon has shown, a date at the earliest opportunity is now needed.

Mr. Speaker: The right hon. Member for Stockton (Mr. Rodgers) gave me notice this morning before 12 o'clock that he might seek to make an application under Standing Order No. 9. The right hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the action that Her Majesty's Government propose to take and the further consultations that are planned in implementing the decision of NATO Ministers to modernise theatre nuclear forces.
I have listened with great care to the exchanges this afternoon and to the arguments that the right hon. Gentleman advanced. The House knows that an emergency debate is not the only way in which this matter can be discussed, but it limits my responsibility in the matter as to whether it shall be debated tonight or on Monday next. That is the limit of the power that is given to me, and I do not decide whether it will be debated. The House itself must remember that. I have no power to decide whether it shall be debated.
As the House knows, under Standing Order No. 9 I am directed to take account of the several factors set out in the Order but to give no reasons for my decision. I have to rule that the right hon. Gentleman's submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House. [HON. MEMBERS: "No."]—Order. There can be no point of order on my ruling.

Mr. Heffer: On a point of order, Mr. Speaker. The point has nothing to do with your ruling. It is another matter of importance. On the Order Paper there is


notice of debates on the Civil Estimates and Supplementary Estimates which I understand will, or can, be discussed after they have been passed on the basis of the Consolidated Fund Bill.
Those Estimates include an increase from £36 million to £40 million for the secret service. When will it be possible for hon. Members of this House to query this increase of £4 million? When may we ask what that £4 million is for, or what the £36 million is for? What accountability is there in the matter? Are the sums for extra pay or new equipment? What is the extra money for? When and how are we in this House able to query the affairs of the secret service, the amount of money spent on it, the way in which it operates, and its accountability to Parliament and the people of this country?

Mr. Speaker: I am obliged to the hon. Gentleman for the way in which he made his point of order. Today's debate on the motion is in the name of the right hon. Gentleman the Leader of the Opposition and his right hon. Friends. Therefore, it would not be possible for the hon. Gentleman to raise that matter today. The remaining motion on the Order Paper, which presumably will not be reached before 10 o'clock, will have to be put forthwith without debate. However, the debate on the Consolidated Fund Bill takes place next week, and the hon. Gentleman—or any other hon. Member—would be able to raise that topic if he were successful in the ballot. I wish the hon. Gentleman the best of Christmas luck. That is all I can say.

Mr. Les Huckfield: On a further point of order, Mr. Speaker. You will have been informed that I also tried to give notice that I intended to make a Standing Order No. 9 application, but under the Standing Order notice must be given by 12 o'clock. Unfortunately, the urgency of the matter was not apparent until after then, because I was in the British Aerospace Bill Committee.

Mr. Speaker: I had intended to remind the hon. Member for Nuneaton (Mr. Huckfield), as I reminded the hon. Member for Salford, East (Mr. Allaun) earlier in the week, that if notice is not given before 12 o'clock a Standing Order No. 9 application cannot be made. However,

since the hon. Member says that the information was not available before 12 o'clock, he may make his application.

Mr. Huckfield: I shall not trespass, on the time of the House or upon your generosity, Mr. Speaker. I seek to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the failure of certain Department of Health and Social Security offices to make appropriate social security payments at Christmas time through the suspension of staff at their various offices.
I was unable to give you the appropriate notice, because the urgency of the matter was not brought to my attention by 12 o'clock. I apologise to you, Sir, and to the House for not being able to give that notice.
I submit that the matter is urgent, because if action is not taken by the Department the backlog will not be cleared and many people in my constituency and others will not receive their payments in time for Christmas. There is a cooperative attitude by the Civil and Public Services Association. Action by the management side—and that means the Secretary of State—is necessary if progress is to be made.
I submit that the matter is urgent and that it requires action. I submit that it falls within the competence of the Secretary of State. Unless action is taken and unless the Secretary of State involves himself, many of my constituents and many constituents in other parts of the country will have a bleak and miserable Christmas.

Mr. Speaker: The hon. Member for Nuneaton asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
the failure of certain Department of Health and Social Security offices to make appropriate social security payments at Christmas time through the suspension of staff at their various offices.
I listened with care to the hon. Member. I realise that he has raised an important matter. The House has instructed me to take into account the several factors set out in Standing Order No. 9 but


to give no reasons for my decision. I have to rule that the hon. Gentleman's submission does not fall within the provisions of the Standing Order and therefore I cannot submit his application to the House.

Orders of the Day — SUPPLY

[8TH ALLOTTED DAY]—considered

Orders of the Day — CIVIL ESTIMATES, 1980–81 (VOTE ON ACCOUNT)

Motion made, and Question proposed.

That a sum, not exceeding £19,180,759,800, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for Civil Services for the year ending on 31st March 1981, as set out in House of Commons Paper No. 272.

Orders of the Day — STEEL INDUSTRY

Mr. Speaker: Before we begin the debate, I remind the House that many hon. Members are fully entitled to be called because steel is a predominant industry in their constituencies. However, they cannot be called unless hon. Members are brief. That includes Privy Councillors, who have the privilege of being called because they are Privy Councillors.

Mr. Norman Atkinson: On a point of order, Mr. Speaker. Do Privy Councillors really have the privilege of being called because they are Privy Councillors and not because you have called them?

Mr. Speaker: The hon. Member for Tottenham (Mr. Atkinson) is splitting hairs. He knows that from the beginning of time, as far as we are concerned, a special privilege is attached to Privy Councillors.

Mr. David Alton: On a point of order, Mr. Speaker—

Mr. Speaker:: Order. We are in the season of good will, or on the threshhold of it, and I want to be as obliging as I can. I am appealing to those who will be called to be fair to others. We have lost an hour already.

Mr. Atkinson: On a point of order, Mr. Speaker. You claimed to want to discard some of our traditions. A self-perpetuating privilege of this type should be high on your list.

Mr. Speaker: I have often said that I am against privilege except when I share it.

Mr. Alec Jones: I beg to move,
That Class IV, Vote 24 be reduced by £10,000 in respect of the salary of the Secretary of State for Industry.
I already regret that the figure of £10,000 is used. In view of the leak from the Treasury memorandum which appeared in the newspapers this morning, a more appropriate figure would be £10,010. That would demonstrate our contempt for the proposal which seeks to take £10 a week from the wives and children of workers if they dare to strike.
The Secretary of State for Industry is described as the chief architect of these proposals. He has suggested that no special provisions for hardship should be made, even in distressing circumstances. By that action the right hon. Gentleman has removed the mask which the Conservative Party wore throughout the election campaign. He now displays the cruel, callous and inhuman face of Toryism.
In the debate on the steel industry on 7 November, hon. Members on both sides of the House agonised over the decision to close Corby and Shotton. That was bad enough. Few hon. Members who were present then would have believed that within one month the British Steel Corporation would propose to reduce the BSC's manned steel-making capacity from 20 million tonnes to 15 million tonnes a year. That proposal is based on the Government's insistence on an unrealistic break-even date. The proposal will lead to the loss of 50,000 jobs in the steel industry, with devastating consequences for the coal industry. It will be a massive blow to many thousands of suppliers of goods and services to the National Coal Board and the BSC.
The Secretary of State for Industry's attitude is that these are not matters for him. In the previous debate he said that he was no manager. He can say that again.
At the end of his speech on 7 November, the Secretary of State said:
Upon the competitiveness of the steel industry and the co-operation between management and work forces depend the security and

standards of living associated with this industry."—[Official Report, 7 November 1979: Vol. 973, c. 456–7.]
We all agree that competitiveness should be the goal for steel and other industries. This has been recognised by the steel unions and the workers in the industry for many years. How else could we have accepted the closures of the past 10 years?
The loss figures are interesting. The loss per tonne of steel in France is £32, in Italy £21, in Belgium £20 and in the British Steel Corporation £17. Those figures hardly support the view that our steel workers are less competitive than their counterparts in Europe. We accept that there should be co-operation. However, there must be two-way traffic. Co-operation does not mean that the management of BSC or any other industry should call in the work force and tell it of its plans. Co-operation means full discussion and negotiation on the content of plans before they are finalised.
Those plans which the British Steel Corporation has announced affect not only BSC but the lives of steel workers, their families and whole communities; and there has been considerable co-operation in the first half of this year. I quote from the interim statement of the British Steel Corporation:
Certain plants achieved major improvements in costs and performance. Port Talbot, which lost £30 million last year and Scunthorpe, which lost £28 million, achieved break-even and Llanwern and Consett made substantial progress towards breakeven".
How cynical that must sound now to those workers in Port Talbot, Scunthorpe, Llanwern and Consett who must surely now be asking what is to be their reward for the co-operation that they have given over the year.
The missing element in the analysis by the Secretary of State is that he does not accept any responsibility at all. He is apparently prepared to stand aside and to leave it to the British Steel Corporation, and to leave to the BSC alone decisions which could lead to the de-industrialisation of large parts of this country. But of course it is not only in steel that the Secretary of State has denied his responsibility. On Monday he and his other Ministers, answering parliamentary questions on Inmos and the sale of MG and the proposed sale of


part of BSC, washed their hands of all responsibility in this matter.
One is drawn to ask; why on earth do we need a Secretary of State for Industry? We on this side believe that no Secretary of State can sit idly by and watch our steel industry being so savagely and hastily axed, with consequences for coal and other industries. Some Conservative Members, especially those with steel interests in their constituencies, expressed similar views in the debate on 7 November. They are beginning to get worried and some believe that at least a brake should be applied to the BSC proposals. If the right hon. Gentleman sticks stubbornly to his irresponsible policy of non-intervention, our modest motion to reduce his salary by £10,000 deserves to be carried, for unless he reverses his policy and accepts his responsibilities there will be little industry left for him to be responsible for.
For obvious reasons, I will concentrate on the steel closures in Wales, not because I am indifferent to the serious problems that exist in other parts of the United Kingdom—and I am sure my right hon. and hon. Friends will spell those out—but I hope that much of what I have to say they will regard as relevant to their parts of the United Kingdom as I believe them to be for Wales. I am sorry to say that. South Wales is likely to be the region worst affected in terms of plant closures, and I invite the House to consider the recent events in the month of November.
On Friday 9 November it was announced that steel making would end at Shotton with the loss of 7,000 jobs, despite a promise that it would be safe until at least 1982. On Wednesday 21 November, the Secretary of State for Wales told a meeting of the Welsh Grand Committee that on the previous day he had met the managing director of BSC's steel division, a Welsh division, and the Secretary of State said:
The steel industry in Wales still faces serious problems but the improved performance at Llanwern and Port Talbot over recent months is encouraging…"—[Official Report, Welsh Grand Committee, 21 November 1979; c. 13.]
So we were cheered up, but within 24 hours of that statement news was leaked of a further 2,000 jobs that were to go at Port Talbot by next March, in addition

to the 1,000 previously announced. A week later we received a further blow, learning that a further 9,000 or 10,000 jobs are to disappear at Port Talbot and Llanwern. So 19,000 steel jobs will disappear, all announced in less than one month. These steel closures trigger off further redundancies in the public and private sectors of our industry. They will mean at a minimum the loss of 8,000 jobs in our coalfields and the closure of 11 pits.
That is not the end of the story. The National Coal Board in South Wales pays £56 million a year to firms in South Wales supplying goods and services, and £24 million of those sales will now cease, and with them many more jobs will disappear. So it is a minimum of 27,000 jobs in steel and coal, plus some thousands which are to be lost in other industries. It is a disaster for South Wales and these proposals, if carried out, will tear the heart out of industrial South Wales. Are the Government or any Secretary of State to say that they have no responsibility for that? No matter how much the right hon. Gentleman may seek to wash his hands of it, his hands will never be clean again.
The BSC axe falls not only on South Wales. The cuts spelt out by the corporation are a nightmare for many constituencies throughout the country. Consett, which is now most likely to be the new Jarrow of the North, Scunthorpe and Scotland are to lose 50,000 jobs in steel alone, and, however optimistic one may wish to be, if one takes losses in other firms supplying the BSC, the total job losses must run into many more tens of thousands. I hope that the right hon. Gentleman can provide us with his estimate of the total job loss when he speaks later.
In the debate on 7 November the Secretary of State referred to an "awkward tussle" between the British Steel Corporation and the NCB over the prices of imported coking coal. It is not an "awkward tussle" between those two nationalised industries. He has a responsibility in this matter. His break-even demands have obliged the BSC to seek the cheapest source of coking coal; but it is folly to allow even a short-term minimal advantage to one nationalised industry like steel to deal a mortal blow to another like coal, and a blow also to


the long-term energy interests of the nation.
There has never been any question raised regarding the quality of South Wales coking coal. I do not deny that price is the problem. South Wales coking coal has been said to be £10 a ton dearer than American coal. But these prices vary, not just from week to week or month to month but with almost each shipment. I have been given figures which lead me to believe that the consignment of 18,000 tons which recently came in that much-publicised ship the "Maria Lemos" involved a difference of around £2 per tonne. Price differentials can be bridged, but not by the British Steel Corporation and the National Coal Board alone. That can be done only if the Government play their part. I believe that those price differentials can and should be bridged by a modest, tapering subsidy. In the working out of such a subsidy, the calculation should be made after we have had some kind of independent audit which examines the price differentials of delivered coal.
I know that subsidies are anathema to the right hon. Gentleman, but they are not so regarded by our partners in Europe who subsidise their coal far more than we subsidise ours. If the right hon. Gentleman wills that we have no such subsidy and we see the full effects of the BSC's proposals, the total consequences will be the loss of up to 15,000 miners, not just becoming unemployed but being lost to the industry for all time, and the closure of 21 collieries, and that coal lost for all time, because one cannot mothball a pit. Other coalfields face similar redundancies. If these men are driven out of the coal industry, they will not be available when we as a nation need them in the future, when North Sea oil and gas have run out. We could then find ourselves sitting on a bed of coal without the means of extracting it, because it is a fact of life that one cannot get coal without miners and we shall not find many miners being recruited from Finchley or Pembroke, and very few from Leeds, North-East. We should then become more dependent on imports of foreign coal, and those sending them could, in turn, charge us whatever they wished, or could even cut off our supplies if their home markets needed the coal.

It would then be too late to accept the responsibility which rests on the Government now.
The Secretary of State in that debate—it was only a month ago, but it seems years—told us that
the chairman of the BSC…plans and intends…to break even by the end of March 1980".—[Official Report, 7 November 1979: Vol. 973, c. 450.]
That is what the Prime Minister told the Welsh TUC when representatives met her. Opposition Members and some Conservative Members then said that that was not possible, and so it has turned out. The British Steel Corporation in its interim statement states that
the objective of break even by March 1980 will not be met…Therefore, the objective must stand for realisation at a very early date.
The question is: how early is "very early"?
The unrealistic break-even date was a factor in encouraging the BSC to produce the closure plans that it announced recently. If the BSC continues to strive for an unrealistic break-even date, it will inevitably lead to hasty, irreversible and ill-judged decisions resulting in our iron and steel industry becoming incapable of meeting our own needs, especially when the upturn in the market comes—or are we building a steel capacity on the assumption that there will never be an upturn in the market?—and certainly incapable of competing in world export markets. This is not a plea from the Opposition only. Government supporters have made it, too.
Therefore, let the Secretary of State for Industry enter into urgent and meaningful discussions with the British Steel Corporation for more realistic progress to break even. If he wants some encouragement, in today's Western Mail—which I am sure the right hon. Gentleman reads avidly—there is a report of a meeting between British Socialist European MPs and the EEC Industry Commissioner Viscount Davignon, who told them that
he was prepared to meet representatives of the British Steel Corporation, the United Kingdom Government and the trade unions to see how the EEC Commission could help delay the massive redundancies and the period of retructuring the steel industry.
I invite the Secretary of State to take him up on that offer
The BSC's assessment is that we, as a nation, need to produce only 15 million


tonnes of liquid steel a year. From that assessment flow all the other consequences—the closures, the redundancies, the effects on other industries and the future of the steel industry itself. It is absolutely essential that we get the figure right. In my view, it is not enough for the BSC or, with respect, for the Secretary of State for Industry to be satisfied that it is right. It is of such crucial importance for the future of this country that the House and people outside should be satisfied. That calls for a complete opening of the books on this subject, for the BSC target of 15 million tonnes is partly dictated by apparent market trends.
As regards market trends and the consequences that flow from the BSC's decision, it seems that there has been too hasty a change in the BSC's assessment. In July it was so confident that it would break even that the Secretary of State was able to repeat it in the House a month ago. Now, apparently, there is no hope of that. That does not give me much confidence in the BSC's assessments.
The BSC is deciding its steel-making capacity and, hence, the future of the whole industry at the very time when the United Kingdom and most of the world are in the midst of a serious recession. It is not proper, nor is it common sense, to decide future productive capacity when demand is at its lowest. Of course, there was some suggestion in The Guardian last Wednesday, refuted by a rapid speech by Commissioner D'avignon on Saturday, that even members of the EEC Commission had some doubts and were talking about the gloomy forecasting made by the EEC itself.
To support my view that there are serious doubts about the validity of the 15 million tonnes target, the Steel Industry Management Association—I can hardly believe that it is rabid Marxist in its views—has said that
the Association holds that the deep retrenchment now being proposed has been too hastily adopted and will needlessly further the process of failure compounding failure until the common heritage"—
the steel industry—
is virtually destroyed.
Therefore, there seems to be considerable doubt whether 15 million tonnes is the right target. As long as that doubt persists, the decision to stick to the 15 million tonnes capacity should not be

left entirely to the British Steel Corporation.
The BSC is in some ways already modifying its proposals. In South Wales just over a week ago, Sir Charles Villiers said that the only options were to close Llanwern or Port Talbot, or half of each. But we now know that a third option has been mentioned—scaling down the capacity of both plants to about 2¾ million tonnes of steel per annum. That is called work sharing. But it is not an easy or soft option. It is one means at least of ensuring that we retain a steel industry capable of supplying the home market of the future and of competing for exports.

Mr. Dafydd Wigley: Does the right hon. Gentleman accept that there is another option, not only in the context of South Wales but elsewhere, namely, to look seriously at the stopping of steel imports into the United Kingdom? That is a drastic solution that perhaps we would not want to contemplate in a general context, but, given these circumstances, is it not one that we must face?

Mr. Jones: I must advise the hon. Gentleman to wait until page 13, 14, 15 or even 75 of my speech—I am not sure where it happens to be—because I shall be coming to that point.
In the first half of this year, the British Steel Corporation claimed that it had maintained its share of the United Kingdom market at 54 per cent. British private steel producers accounted for another 26 per cent. That means that imports account for 20 per cent. of the home market. Direct imports of steel have increased from 13 per cent. in 1973 to 21 per cent. in 1978. I know that includes steel of a specialist nature. But are we to say that we must opt out of that kind of market? Even if we do, it still leaves 41 per cent. of our market in sheet steel dependent on imports. I should have thought that an enterprising British Steel Corporation would set out to capture some of this home market for itself. But the BSC seems content to accept 54 per cent. of the home market as its natural ordained share.
Few steel workers to whom I have spoken see any evidence of any determination or even desire on the part of the British Steel Corporation to increase its share of the market. The BSC may argue


that it needs time for such efforts. Certainly it needs time, but I believe that it will need more than time. On previous occasions, we have welcomed the D'avignon plan as a measure of protection, to put it no higher, but the threat to our steel industry now comes from inside Europe.
The NEDO studies show that the cause of high input penetration into United Kingdom markets was sales by European companies at prices below production costs. I now reply to the hon. Member for Caernarvon (Mr. Wigley). I hope that the Government will look at a letter that has been sent to the Wales TUC from the office of the Secretary of State. The letter is not signed by the Secretary
of State, but it points out that it was written at the Secretary of State's request. It says that the Government
recognises, however, that there may be instances where competition, particularly from low cost sources, increases at such a rate that a normally viable industry does not have time to adjust at a reasonable pace without unacceptable disruption and loss of jobs. Under such circumstances the Government would be prepared to consider selective import measures of a temporary nature.
I put it to the Government that such circumstances exist now in the steel industry. The BSC's proposals have caused, and are causing, unacceptable disruptions and a loss of jobs that is unacceptable to many of us. If that letter from a Government Minister means anything, it must mean that the Government should act now as regards temporary selective import controls.

Sir Anthony Meyer: At an earlier stage in his speech, the right hon. Gentleman referred to tapering subsidies. He has now referred to temporary import controls. In what circumstances does he foresee the end of those tapering subsidies and those temporary import controls?

Mr. Jones: The tapering subsidies to which I referred apply to the coal industry. The hon. Gentleman is aware that considerable investment has been made in the coal industry in recent years and that, as the Secretary of State told us in the Welsh Grand Committee a short while ago, productivity within the coal industry showed remarkable progress last year. In my view and that of the

industry, the coal industry in South Wales will pay its way within a reasonable period of time and will not need subsidies.
I stress the word "temporary" as regards temporary import subsidies. If we rush and push the BSC into trying to break even far too soon, either we must say that we do not want a steel industry or the Government must accept the consequences and introduce the sort of control that I have suggested.

Mr. Edward Rowlands: Does my right hon. Friend accept that his argument applies not only to temporary steel imports but to temporary coal imports? That is vital to this issue. If we could operate temporary import controls on coking coal into the South Wales coalfields, we could save them.

Mr. Jones: I do not know that we need to go as far as that. We need only a fairly reasonable tapering subsidy on coking coal. But the coal industry, and in particular the coking coal industry, is being subsidised by those competing against us to a far greater extent than we are subsidising that industry.
What I said about import substitution and imports applies equally, but in a different way, to exports. Last year, exports of steel represented about 2·9 million tonnes. From my discussions with the BSC just over a week ago, the corporation seemed to be far too willing to give up that export market. Those in the industry see little evidence of the BSC's willingness to adopt a reasonably aggressive policy towards exports. On the contrary, it is anxious to withdraw from that market.
The Steel Industry Management Association—whose members are not card-carrying members of my party but people in the industry, predominantly middle management people who have grown up in the industry—has stated in the document submitted that foreign markets can be held and regained. The BSC should, therefore, seek to do far more in the export market.

Mr. John H. Osborn: The right hon. Gentleman is falling into the trap of being a manager in relation to that body. I have received the letter signed by Mr. Muir, the


general secretary, and I agree with much of what he said. Surely it is up to managers to influence the managers above them and debate this issue Within the structure of an industry or a company, rather than write to us at this stage, when the decision has been made.

Mr. Jones: If I had held that attitude, after so many years in the House, towards all the organisations that write to me, I should have sent back 95 per cent. of my mail. It is reasonable for any organisation like this to express its view to Members of Parliament, since ultimately we may or may not part with money to support the industry.

Mr. Osborn: Surely they should express their views internally, within the BSC, and influence their senior managers.

Mr. Jones: They have probably done that, but there comes a time when one keeps knocking one's head against a brick wall. One knows that one is not getting any further and so one tries another source of advertising one's grievances. Because of that sense of grievance, there is a growing demand for a full examination of BSC's management. That wish was expressed by many hon. Members in the debate a month ago.
Why is that demand growing? There is a feeling in the industry that the BSC is reluctant to undertake genuine negotiations with its work force. There is a complacent attitude towards exports and towards import substitution. There is a disregard for solemn promises that have been made, for example, in Shotton, that must have a demoralizing effect on the industry as a whole. The extent of these present cuts and the sudden changes in the forecasts given by the BSC must cast doubt on the BSC's management. That is why The Guardian last week quoted officials of the European Commission as describing the BSC as a "completely demoralised organization".
It is time that the Secretary of State accepted responsibility and instigated that examination. In all these considerations—the time scale for breaking even, the subsidies for coking coal, the future size and capacity of our steel industry, and the management of the BSC—the House has a duty to ensure that hasty decisions forced on the BSC by the Secretary of State and the Government do not damage the long-term industrial prospects of

Britain. That is the burden of our complaint against the Secretary of State.
Yesterday I made a suggestion in Committee that I shall repeat now. It may be worth while for the Prime Minister to consider transferring the Secretary of State to the Department of Health and Social Security. That would kill two birds with one stone. He made a mess of National Health Service reorganisation last time, but, in view of the consultative document, even he could not do worse this time. At least that would have the merit of taking him off the back of the BSC and of industry in Britain. Obviously that will not be acceptable, but the right hon. Gentleman does not earn the salary that he draws and the House should vote accordingly tonight.

The Secretary of State for Industry (Sir Keith Joseph): The right hon. Member for Rhondda (Mr. Jones) made a strongly felt speech.—[HON. MEMBERS: "Where are Conservative Members?"] During the last debate in which I spoke, only two or three Opposition Members were present. It so happens that today there are some more, and I welcome them, because it is an important subject. I am glad that they are here in reasonable numbers.
I shall challenge the assumptions on which the right hon. Gentleman's speech was based, but I do not challenge his sincerity. It was a powerful speech and, to someone who has not looked behind the present position, it was perhaps a plausible speech. It was certainly a speech on a very important subject which no hon. Member would want to underestimate.
However, I think that the right hon. Gentleman was assuming, as are some of his right hon. and hon. Friends—only seven months after they have left office, with all the experience of that period in office apparently slipping
from their memories—that Government intervention in nationalised industry management benefits the industry concerned. As I shall try to show, the evidence is that, however well-intentioned the intervention of Government is in nationalised industry management, it tends to do more harm than good. [HON. MEMBERS: "What about appointments?"] It is important that the Government should appoint management to the nationalised industries, set


the management targets and let it get on with it. It may even be necessary to change the management. However, interfering in the judgment of management is a dangerous process. I shall argue that, had the previous Labour Government not interfered so much with the steel industry, we would not now be debating such a dramatic situation in steel.
The background to the present position of the British Steel Corporation reveals a catalogue of errors. I shall name only the headings of those errors. First, there was nationalisation. Then, after denationalisation by us, there was renationalisation by a Labour Government. It was renationalisation in the most centralised form. There was then an ambitious capacity target for the newly nationalised steel industry which was set by the Conservative Government in the early 1970s. It is now plain that that target, although it was not a bit obvious at the time, proved to be too optimistic. We may have been too optimistic in setting the target, but the Labour Party through its then spokesman, wanted to go even further. He wanted to have an even larger steel industry which, we have since found, was an overestimate of market demand.
The expansion which the Tory Government authorised and launched was carried out at a huge cost of more than £2 billion to the taxpayer. That was launched at a time when there was a seller's market but was carried out at a time when the world was turning ever more steeply from being a seller's market into a buyer's market. Therefore, the steel industry was modernised and expanded at huge cost for the purpose of becoming competitive. That was the express purpose of successive Governments—to produce steel at a competitive price so that the industry could become viable and could offer good and secure jobs with high output and, therefore, high pay to a self-respecting labour force.
It was always agreed throughout the House—it was agreed by the Labour Government as well as by Tory Governments, and it was agreed nominally by the British steel management and the steel trade unions—that a vast expansion plan which provided the industry with new equipment and modernised plant had to be accompanied by the systematic closure of the obsolete plant. It was also

agreed by all sides that the new industry should have much higher productivity as the improved plant was brought into existence and in such old plant as remained in action.
The fact is—and this is one of the most severe charges against the Labour Government which undermines the right hon. Gentleman's argument that Government intervention does good—that the Labour Government flinched from taking those steps. As soon as they came into office in 1974, they instituted a review of the planned closures, which will always be remembered by the name of Lord Beswick. I do not want to question their sincerity or good intentions, but the Labour Government delayed the closures that were always part and parcel of a modernisation Man. Thus they loaded on to the corporation, its users, suppliers and work force the extra costs that go with too many plants, each of which is inadequately loaded.
It is also a fact that the higher productivity on which the whole plan was based was just not secured during the time of the Labour Government. The result was rocketing costs that forced even the Labour Government, after a series of dramatic debates in the House, and after a powerful report by an all-party Select Committee, to bring forward prematurely—compared with their pledged dates—some of the closures that had been delayed by the Beswick review.
Meanwhile, and here I cannot conceivably blame the Labour Government, new and more powerful steel industries had grown up in other parts of the world. Instead of building a new and modernised industry that would be able to capture a larger share of the home and world markets, British Steel found itself competing without being allowed to carry out closures, without being adequately encouraged and supported to secure higher productivity and with more and more powerful competitors from any other parts of the world.

Dr. Jeremy Bray: Does not the right hon. Gentleman agree that during that time employment in the steel industry fell by about 30,000, that there were a great many plant closures and that the labour costs per tonne were lower than in France, Germany or Holland? Is he not aware of those facts?

Sir K. Joseph: I have paid tribute to the fact that the Labour Government, after many debates in the House and a report by a Select Committee, were forced to allow some of the closures that they had previously delayed. The fact is that, at the end of the Labour Government's term of office, the output per man-year of workers in the British Steel industry was about half that of the best West European competition.

Dr. Bray: What about labour costs per tonne?

Sir K. Joseph: Labour costs per tonne must take many factors into account, including the exchange rate. Not only did British Steel find itself prevented by Government interference from carrying out the purposes of the plan, not only did it find that more powerful competitors had come into existence throughout the world, but it found that it was faced with a falling market. There was a falling market at home, where our own industrial troubles, especially in the car market and in mechanical engineering, reduced demand from some of its most important clients. There was also a world steel recession. Not only did it face a falling market at home and abroad, but it still had not solved all of its quality problems and, as a result, it could not even compete on quality in some of its activities.
Now, the British Steel Corporation, with modern plant but very low average productivity and still, alas, some quality problems, faces very much sharper competition in the most severe recession that steel has known in modern times. The position is not static. The market is deteriorating and dwindling. It is no wonder that the BSC has had to revise its plans.
The right hon. Member for Rhondda makes that into an indictment of the BSC, but the market has been changing for the worse and the prospects remain grim. It is that combination of factors—of slump in demand, more competition, high costs, low productivity and patchy quality—that the BSC faces.

Mr. Barry Jones: The right hon. Gentleman knows that Shotton is due to lose its steel-making capacity but that 4,500 jobs will remain. Can he guarantee that those jobs will remain?

Is he aware of the increasing speculation that they are no longer safe?

Sir K. Joseph: The hon. Gentleman knows that I am unable to give an answer—it is for the BSC management. I have no reason to cast doubt upon those jobs, but I am not the management—[Interruption.] No, I am the representatative for the time being of the owners of the industry. The hon. Gentleman may find that he has inadvertently done some harm to local confidence by posing that question, knowing that I would not be able to give an answer from my knowledge. I suggest that he asks the BSC management.

Mr. Jones: Surely the right hon. Gentleman is aware that the local "Daily Post" carries a headline on its front page six inches deep speculating that the jobs are not safe.

Sir K. Joseph: I still say that the hon. Gentleman should address his inquiries to BSC. Knowing the hon. Gentleman, I am sure that he already has.
BSC faces no market for a large part of its capacity. That reflects, not only the fact that successive Governments installed more capacity than the market has turned out to justify, but that BSC has not been allowed to run down its capacity and has not been encouraged to secure the higher productivity that would have made the remaining capacity more competitive. It is those facts that compel BSC to match supply and demand. We are now witnessing a commendable attempt by the management to deal with a difficult and fast deteriorating position.
The right hon. Member for Rhondda pointed out, rightly, that it would be wrong of BSC to reduce capacity to the extent that it would jeopardise its chances of meeting a rising market, when the market rises again. That is why BSC proposes to retain more capacity than will now be brought into use so that a reserve will exist for the expansion when it comes.

Mr. Donald Anderson: Is the right hon. Gentleman arguing that if whole areas of the country are devastated the Government have no responsibility over import policy and that they will stand by idly and watch the catastrophic effects of the policies that they are pursuing?

Sir K. Joseph: I do not suggest that for a moment. I shall come on to deal with both those propositions. Of course, the Government have responsibility for appointing the management of the nationalised industry and for doing what is practicable to remedy the social consequences of industrial change. We also have responsibility for the tariffs and law connected with imports.

Mr. Alan Clark: I hope that my right hon. Friend will appreciate that I am not commenting in any critical sense. However, if foreign imports are to be excluded and the market is to be protected against them, has my right hon. Friend made any comparative studies, or is he able to give an off-the-cuff estimate, of the relative difference between the effect on the economy of increased prices because of BSC's lower efficiency and the alternative effect on the economy and the PSBR of paying out enormous sums in unemployment benefit and severance pay?

Sir K. Joseph: I have made no studies of that precise sum in these circumstances. I am sure that my hon. Friend will recognise that we should not judge the unemployment consequences as if they were static and permanent. We must assume that there will be change.

Mr. Bill Homewood: The right hon. Gentleman has talked about excess capacity. Will he tell the House the present excess capacity of BSC and what it will be when the butchery has been completed? Will he also tell us what is the excess capacity of the rest of the EEC countries, Japan and America?

Sir K. Joseph: No, of course I cannot. That is a management decision. Labour Members may mock at my assertion that it is a management judgment and a matter for management decision, but I invite the House to look at what happened when the previous Government tried to second guess management over the Beswick review. They had to contradict themselves and allow closures to go ahead three years after they stopped them.
The target must be to compete profitably. I will return to the question of imports—I have not forgotten the question of the hon. Member for Swansea, East (Mr. Anderson).

Mr. Alex Eadie: In the course of the right hon. Gentleman's remarks, when talking about the country's indigenous resources, he said that an industry should not be run down to such an extent that it could not be revitalised. How does he apply that dictum to the coking coal industry? My right hon. Friend the Member for Rhondda (Mr. Jones) pointed out that if coking coal pits are closed they will be closed for all time. That would be a terrible crime against the nation.

Sir K. Joseph: I am coming to the question of coking coal.
The target has always been, and must remain, that BSC should compete profitably in price and quality or else it will dwindle. I have tried to put the argument that I believe underlies the debate as strongly and in as relatively few words as possible. If BSC is not competitive that will destroy more jobs than those that will be lost by making it more competitive. That applies not only to the steel industry but to the users and as possible. If BSC is not competitive, will involve fewer jobs being lost than its not becoming competitive. Those who care about jobs—I am sure that that is true of all hon. Members—should recognise that fact. Some jobs must go to safeguard the rest.

Mr. Rowlands: Nonsense.

Sir K. Joseph: If the industry is not competitive, it will lose more and more of its home market and will not win overseas markets. However, it is perfectly legitimate for Opposition Members to ask the Government, as the right hon. Member for Rhonnda has done, to give BSC longer to become competitive. Nevertheless, I am afraid that there is little time for BSC to put its house in order.
Imperfect as the Davignon measures are in some respects, they have created a reasonably ordered market in Europe. Some of the less efficient producers have been protected from the full force of competition from the more efficient producers. The measures are designed to provide temporary respite only, so that European steel producers can restructure their production to the demand of the market and compete on level terms. If BSC is to survive in that market—of


which the United Kingdom is an inextricable part—rapid action is necessary to improve productivity to the best international standards.
Capacity reduction had to be undertaken. Productivity had to be increased. There is no point in spending more taxpayers' money at the expense of other forms of public spending to make steel that no one is willing to buy. Unless BSC reduces its output, it will be producing steel that no one will be willing to buy in current and predictable market conditions. The financial target that the Government have set is no more than a recognition of the situation. The cash limit will provide sufficient finance for BSC to undertake the necessary restructuring. To concede further funds to cover operating losses would ignore the short time that is available to BSC to return to viability.

Mr. Norman Atkinson: Although those are the most important, it is possible to take—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. Member knows that sedentary observations are not approved of.

Sir K. Joseph: Some hon. Members have asked whether, if money is not to be provided from the taxpayer, imports should not be controlled.

Mr. James Callaghan: Before the right hon. Gentleman leaves the question of finance, will he answer these factual questions? They are concerned not with management but with the Government. He said that he would not finance steel losses beyond 31 March. As I understand it, the BSC produced a plan which provided for substantial reductions within that context. It now says that it cannot break even by 31 March. Will the Secretary of State say what is the Government's policy and what the consequences of that policy will be in the year beyond 31 March? Will the corporation have to close more steelworks so as to break even or will the Government provide a temporary subsidy to enable it to break even?

Sir K. Joseph: The answer to the last part of the right hon. Gentleman's question is "No". The Government said that we intended to finance no operating loss in the year 1980–81. We are providing

from the taxpayer £450 million for necessary capital expenditure and restructuring costs.

Mr. Callaghan: Does the Minister realise what uncertainty that reply is creating? If there is now a plan of closures that is based on breaking even—and we are now told that the Government and the BSC accept that it will not break even—is he not saying that the plan of reductions is not complete and that there will be more job losses? Will they be at Shotton? Where will they be? This is not a simple management question, as Government policy could obviate the reductions.

Sir K. Joseph: With great respect, the right hon. Gentleman is taking two different propositions. One proposition is—it comes from the BSC—that the corporation will not break into profit by the end of March 1980.

Mr. Callaghan: It will make a loss.

Sir K. Joseph: It will make a loss in the last quarter of the current year. The proposition to which I adhere is that the Government do not intend to use taxpayers' money to meet an operating loss in the next financial year. The right hon. Gentleman is talking about the position at the end of March 1980. The Government are talking about the whole of 1980–81.

Mr. Callaghan: That is avoiding the argument.

Sir K. Joseph: There is no intention to avoid that.

Mr. Callaghan: May I try again'? I am sure that the right hon. Gentleman—within the limits which he sets himself, but which we do not accept—will want to tell the House what the position is. Our understanding is that BSC will make a loss in 1980–81. Is that his understanding? If he says that it will not make a loss, he is going against the assumptions that are being made by BSC today. That will have serious consequences. Is he saying, alternatively, that BSC will break even in 1981 although it makes a loss in the last quarter of 1979–80?

Sir K. Joseph: My assumption and intention are that the corporation should not make an operating loss during the


year 1980–81 after depreciation and interest. I should have inserted the words "after depreciation and interest" in every other reference I made, to 1980–81.
I hesitate to say this. The right hon. Gentleman is confusing the position at the end of the year 1979–80. The British Steel Corporation said that it would not be making a profit at the end of the current financial year. I am saying to the corporation, on behalf of the taxpayer, that it must so organise its affairs that, after depreciation and interest, it does not make an operating loss in the year 1980–81.
No one can foretell—[Interruption.] The House would be wise to listen to the end of my sentence. No one can foretell what the market will be. No one can foretell what self-injury the steel industry may do itself. If the steel workers decided to strike, the consequences might well be more reductions in manpower and more closures because they would have frightened off and lost yet more of their market.

Mr. John Morris: Is the Secretary of State aware that last week I met the chairman of BSC and asked him what, if he had all the cuts and all the closures that the board required, would be the considered view of the board as to when the corporation would break even? He was not able to give an answer. The corporation does not know.

Sir K. Joseph: The management faces a severely deteriorating market position. No one can be absolutely sure that break-even can occur without more changes. Certainly the British Steel Corporation put forward its present proposals to meet the reduced market. It will be able, through its changes, to break even next year on current assumptions.
I was asked about imports. The fact is that we export as well as import. In our view, import controls would be against the interests of this country. They would damage our efficiency and the service by our industry to our consumers and users. The only way in which to compete is not with the help of import controls or protection but through the higher productivity that modern plant makes possible.

Mr. Wigley: Does the Minister accept that many of the consumers for whom he had regard in what he said make a fairly marginal decision between buying United Kingdom-manufactured steel and steel manufactured abroad in terms of quality and availability? There would not be a substantial loss to home producers. If there were import embargos and there were therefore a greater capacity utilisation of the whole industry, which is capital-intensive, that would have a substantial effect on its prices and economics and could well lead to its viability.

Sir K. Joseph: No, I do not agree. The indirect damage done by protection would do far more harm to the industry, and therefore to users, than the relief that the hon. Gentleman foresees. I do not think that the way forward is through import controls.
I was asked about coking coal. The House may like to know that the chairman of the National Coal Board and the leaders of the trade unions are together meeting my right hon. Friend the Secretary of State for Energy next week to discuss the whole problem. That meeting is already planned.
The right hon. Member for Rhondda emphasised the consequences for coal of the present BSC plan. The damage that may be done to the demand for coal flows from the reduced demand for steel. Even if much more money were available to the corporation, if there is no purchaser the steel will not, or should not, be made Therefore, it is the reduced demand for steel that has the impact on the demand for coal.
The steel industry has not been deserted by the Government or by the taxpayer. It is receiving £700 million from the taxpayer this year. That is precisely the same cash limit as we inherited from the last Government. Next year it will receive £450 million towards the necessary capital and restructuring expenses.
The target that I set the BSC, which is to break even next year after depreciation and interest, follows the target set by the right hon. Member for Chesterfield (Mr. Varley) when he said that the policy of the Labour Government was that British steel should achieve profit in the year 1979–80. So the answer is "Yes". The Government adhere to their target. We note that the British Steel


Corporation has offered an earnings increase to steel workers. I ask the House to bear in mind that the corporation has also offered them a share in any gains that may be made in productivity.
I have to say to the House—I am sure that this will be agreed on both sides—that, if the steel workers embark on a strike, they will harm suppliers, their users and the whole country. But a strike would harm one group even more gravely. The strike would harm steel workers themselves catastrophically. The steel industry would lose a market share that would be hard to recapture. A strike would drive the British Steel Corporation deeper into trouble and probably lead to further closures.

Mr. Douglas Jay: Mr. Douglas Jay (Battersea, North) rose—

Sir K. Joseph: I have given way far too much. Although I would have liked to give way to the right hon. Gentleman, I must not do so.
Suppliers to the steel industry who will suffer an impact from the proposed reduction in steel making are being hit not by the BSC plan as such but by the fall in demand for steel that the BSC plan reflects. That is the reality. I have to say to the House that the threat of a strike, even without a strike itself, is already doing, and has for some days been doing, damage to the interests of steel workers. Ever since the threat was uttered, users of steel have been seeking to second-source their steel supplies for fear of a strike.

Mr. John Silkin: Mr. John Silkin (Deptford) rose—

Sir K. Joseph: It would be discourteous to the right hon. Member for Battersea, North (Mr. Jay) if I gave way to the right hon. Gentleman. I must give way to his right hon. Friend if I am to give way to the right hon. Gentleman.

Mr. Jay: I wanted only to ask the right hon. Gentleman whether he understands the damage that is being done to the future defence capacity of this country by the destruction of the steel industry. That capacity largely rests on steel production. Will he look at some of the remarks made by his right hon. Friend the Prime Minister about the need to increase our defensive strength?

Sir K. Joseph: I wish I were in a position so to increase our defensive strength that we could absorb the spare capacity that the British Steel Corporation is keeping in hand even under its present plans.

Mr. John Silkin: Mr. John Silkin rose—

Sir K. Joseph: If the right hon. Gentleman insists, I shall give way.

Mr. Silkin: The right hon. Gentleman will have seen the front page article in The Guardian today in which it is said that the right hon. Gentleman is saying that a strike would be advantageous to BSC because it would save money. Will he take the opportunity to refute that report?

Sir K. Joseph: Absolutely. It would be silly to maintain that a strike would save either the BSC or the taxpayer money. The consequences of a strike are unpredictable. I have never maintained that a strike would save the taxpayer money. I refute totally the statement I am alleged to have made that a strike would save money.
I hope that I will not be thought to be guilty of talking about this industry in an inhuman way. I have the highest respect for the men I have met in the steel industry. They are widely respected as individuals. Their jobs are respected. I beg them not to inflict self-injury on top of market injury by a strike.
Having said that we leave management to make management decisions, the Government accept that it is their responsibility to do what is practicable to cushion the social consequences of industrial change. When the plan is finally decided and carried through, we shall consider in each case what it is sensible to do, just as we have announced our intentions and changes in connection with Shotton and Corby.
I have taken a long time, because I have given way to a number of interventions. I want now to try to sum up the position. The right hon. Member for Rhondda has urged the Government to intervene. The whole emphasis of interventions by Opposition Members has been that the Government should intervene. But the catalogue of errors with which I began my speech today does not inspire anyone in the country, or in this House, to believe that it is sensible to rely on the Government's judgment when


making decisions about a trading market. The evidence does not show convincingly that Governments and Ministers are so invariably right that they can be assumed to know better than management.
Opposition Members have urged deferment in achieving competitiveness and deferment of closures. That is not a sensible approach. Adaptations and redundancies that would have been adequate to secure competitiveness when first proposed often cease to be adequate when they are deferred. Redundancies that might have taken place when the market was stronger and competition less fierce and when there were more job opportunities have to be made, once deferred, in larger numbers because competitors have grown still more powerful at a time, perhaps, when demand is less, competition stronger and job opportunities fewer.
Deferment is not the remedy. We have already deferred too long in making this industry competitive. Nationalisation is with us. There may be opportunities for some non-steel parts of the British Steel Corporation to be sold off. I will encourage any such proposals. We have no plan to denationalise, if for no other reason than that this would not be practicable at the moment.
I must, however, say to the House that I believe that nationalisation has intensified and multiplied the problems of steel's adaptation to a changing market. Centralisation and politicisation of decision-making have handcuffed and straitjacketed the management of the industry. Had there been a variety of owners, efficient and inefficient, large and small, some would have adapted and would have been competitive while some would have gone out of business; and those who worked and invested in them would have found other jobs.
It is not necessarily the party that nationalises that is the most effective friend of steel. Labour has all too often given the impression that productivity is not crucial and that the industry could go on losing money at the expense of the taxpayer. [HON. MEMBERS: "That is wrong."] It is true. I wish to acknowledge that "Road to Viability", published by the previous Government in 1978, offered belated recognition of reality and

brought about the closures that had been deferred under the Beswick plan. The Labour Party has tried to ignore reality. It will surely not want to encourage steel workers to destroy their industry by resisting what is necessary to keep a secure, competitive, high-output and, therefore, well-paid industry. I hope that the House will reject the motion.

Mr. John Morris: We on the Opposition side of the House have listened horror-stricken to the Secretary of State, who now professes to have the stewardship of the steel industry of this country. One message that will go out loud and clear from this debate is that worse is to come. The right hon. Gentleman has spelt out his doctrinaire objections to public intervention and particularly to public ownership of steel. The right hon. Gentleman has forgotten that long before the last public ownership Act it was a Tory Government that intervened to split Llanwern and Ravenscraig. Tory Governments acted where private industry had failed to provide money to Colvilles and RTB. Government and State intervention has existed in the steel industry since long before the war and will be with it for as long as we can foresee. Against that background, it is exceedingly sad that the Secretary of State for Industry, with his doctrinaire and dogmatic attitude, should have the stewardship of that great industry.
This has been a black month for South Wales. Rumour has followed rumour and each in turn has been confirmed in the darkest terms. Only a few weeks ago, the House discussed the steel industry and the Welsh Grand Committee followed that with a discussion on the Welsh economy. There was not a whisper in either debate that the throat of the Welsh economy was to be cut.
Even while the Grand Committee was sitting, trade unionists at Port Talbot were being told of a new cut of 2,300 in the labour force. The Secretary of State for Wales confessed within days that no one had told him about it. The last Tory Minister to complain that no one had told him anything was poor Mr. Macmillan during the Profumo affair.
The Welsh Ministers are like the three monkeys. They see no evil, they believe


that they speak no evil and they certainly hear no evil. To paraphrase the words of Aneurin Bevan, why should we bother with the monkeys when the organgrinder—the Secretary of State for Industry—has been here? The right hon. Gentleman's doctrinaire and blind devotion to cutting public expenditure and rolling back the frontiers of State interest, regardless of the consequences, is bringing South Wales to its knees.
Believe it or not, the right hon. Gentleman was responsible for Welsh affairs a few years ago. If he dares to come to Wales again, he will not find many voters, whether workers, business men or anyone else, who will admit to having voted Tory.
The tragedy for steel generally and for South Wales coal and steel in particular is that long-term decisions, with grave social consequences, are being taken on short-term evidence. The Secretary of State will preside not over a decrease in public expenditure but over an increase—because of social security and redundancy payments.
The right hon. Gentleman mentioned the sum available to the BSC board next year. Am I wrong in estimating that about £150 million will be needed for redundancy payments alone? Where will that money come from? Will it be at the expense of investment? We must have a clear answer to that question.
No one questions Sir Charles Villiers' approachability and courtesy, even in the most difficult circumstances, and in July I asked him whether he still believed that the BSC could break even by March. He pointed out that there would be difficulties but that that was still his aim, even though I made clear that no one believed that that goal was possible. He left me with no impression but that he maintained that it was attainable. Indeed, the stance of the Secretary of State today was a repetition of that view.
The right hon. Gentleman may not know that I asked Sir Charles last week when the BSC thought that it would be able to break even if it achieved all the cuts and closures that it had demanded. The reply was a limp admission that the board had not reached a conclusion. It might pay the Secretary of State to consult the chairman to find out the present view of the board. The right hon. Gen-

tleman appeared to contradict my intervention in his speech.
The Secretary of State may seek to differentiate between his role and that of the management, but we are questioning his role of holding a pistol to the head of the corporation while it is on a journey with no idea of its length, no certainty about when harbour will be reached, but sure that many of its passengers and their dependants will be destroyed along the way. In addition, there is, as the right hon. Gentleman implied, worse to come. Given the BSC's track record, can we have any confidence in its forecasting? If ever there was a classic example of how not to take corporate planning decisions, the BSC is it.
Let me illustrate that fact with the example of Port Talbot. Less than three years ago, the BSC was still clamouring for an £800 million investment at Port Talbot to double capacity from 3 million to 6 million tons. In July 1976 the then Government offered £350 million, which included £250 million for a new hot strip mill. It gives me no comfort to say that my strong public and private advice to the BSC was that it should accept the offer. That was also the advice of Mr. Bill Sirs. The corporation rejected the offer because it was only half a loaf. Some loaf! That half a loaf would be a banquet at Port Talbot today.
Eventually, the Government agreed, in March 1977, to the £835 million for which the BSC was pressing. But before the ink was dry on the announcement the corporation found that the market had collapsed. Within a matter of weeks, it no longer wanted the money, although the annual statement a few weeks before had said that the plan was
commercial, prudent and practicable. BSC must at all costs regain its lost share of the markets.
Within a matter of weeks, the board refused the Government's offer. The Government then offered £80 million, which is ongoing at current prices, for continuous casting. Let no one dare touch investment.
More investment is taking place at Port Talbot than at any steelworks in the United Kingdom, if not in Europe, yet it has had the option of closure hanging over its head in the past 10 days. No wonder my constituents feel that they are living like Alice in Wonderland. The


gruesome inference from the Secretary of State's speech was "what next?"
A prolonged effort has been made at Port Talbot to reduce manning and to increase profitability. The fact that the works became over manned was not the fault of the workers. It was a deliberate management decision—long before the BSC came into existence—to bring in some of the finest and most mobile workers to exploit capital investment as quickly as possible.
In my time, manpower has fallen from 17,000 to about 12,000. Every time that agreement has been sought on manning levels, it has been achieved. There is no need for anyone to tell the work force at Port Talbot about the necessity to be competitive. Constructive and negotiated rationalisation, consistent with providing the steel that is required, will succeed. Let us take the other test, that of profitability. Losses at Port Talbot in the first half of the year were down to £2·1 million, and latterly the plant has been breaking even. The losses per man are among the lowest in the United Kingdom divisions, at £165 in the first half of this year. The plant has worked quickly towards breaking even.
Against that background, we are right to question the plans of the BSC. Given the corporation's track record, is it likely to be right in future any more than in the past? My right hon. Friend the Member for Rhondda (Mr. Jones) referred to the BSC estimate of 15 million tonnes, but that is not the total market. It is the BSC estimate of its share of the market. The market is very much bigger. The steel industry says that there is considerable overcapacity on these present forecasts.
Why should not the British Steel Corporation aim for a higher share of the market? Why should imports of sheet be coming into this country at 30 or 40 per cent. penetration? Is it quality, delivery or price? Are those not management decisions? Or is it that the Government have allowed the pound to become so strong that our steel cannot be sold abroad? All these things need some explaining, and we have had hardly an ounce of explanation from the right hon. Gentleman this afternoon.
There are about seven businesses within BSC, and I ask the board whether it

is prudent for those seven businesses, for marketing purposes, to be in one pair of hands. I would welcome continued decentralisation if that meant that the marketing was more in tune with the centres of production. With the projected imports of steel for Ford of Dagenham next year so much higher, BSC management should do some considerable heart-searching. This should be of concern not only to BSC but also the workers and management at Ford. If South Wales becomes a distressed area, there will be one less market for the motor cars which that company produces.
In passing, may I say a word to fellow Welshmen at Trostre and Velindre? The salvation of Port Talbot lies partly in the hands of those Welshmen. Port Talbot has always been their traditional supplier. It would do them no good in the long run to prefer coil from Ravenscraig or Royal Dutch because it is longer and more profitable. Does anyone believe that, if Port Talbot went, the pressure would not begin to pick those plants off?
I was only a junior Minister but I was present when the Scottish TUC led a formidable and able delegation to my right hon. Friend the Member for Huyton (Sir H. Wilson), then Prime Minister, and four other Ministers demanding, very properly, a whole host of things. That delegation demanded one thing that stuck out like a sore thumb—a Scottish tinplate industry. I understood the aim of the Scottish TUC, even if I profoundly disagreed with its sentiments, and I hope my friends and colleagues in Trostre and Velindre will remember that when it comes to considering our steel.
My constituents ask a question—and it is right that they should ask it: given the staggering losses in the Scottish division of BSC—£3,261 per man per half year—and the fact that figures for Ravenscraig are not forthcoming, why is BSC gambling so much on increased production at Ravenscraig against a time scale of agreed cuts in South Wales by March 1980? I would like to know when Ravenscraig will break even. That is a matter that concerns my constituents.

Dr. Bray: My right hon. and learned Friend the Member for Aberavon (Mr. Morris) has made a very strong attack on a particular part of the steel industry. The increased output from Ravenscraig is


being achieved. He was a junior Minister in the same Department in which I followed him. He is familiar with the steel industry and is well aware that the reason for the high losses at Ravenscraig was that there were long delays in the investment programme there. I am sure that my right hon. and learned Friend will agree that the future of the steel industry is something that we must solve nationally.

Mr. Morris: If my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) looks closely at my remarks, he will see that what I am suggesting is not an attack in any shape or form. I wish no one harm. I said that a gamble was being taken here by relying on increased production that has not come about—

Dr. Bray: It has.

Mr. Morris: —against the need for an agreement to cut production substantially right across South Wales by March 1980. Perhaps my hon. Friend will look at my remarks more closely.
It is with relief that I see that the board has gone beyond its original options—which I advocated it should do last week—in South Wales. There is a gleam of hope for both plants, though not for the individuals who will lose their jobs, by the new option of scaling down capacity at both plants as opposed to partially mothballing or closing them.
I know that negotiations are just about to begin at Port Talbot and I wish those involved well, regrettable though it is that we are travelling down this road of cutting production. I deeply regret that. Of the evils posed, I think this new option is the least evil. Once part of the plant is mothballed, I do not believe there is much chance of reviving it. Today's mothballing could be the death knell of the whole plant within three years. This option would mean that we could remain in business and be ready for an upturn or to fill the gap if others perform less well.
Enormous amounts of capital have been injected into BSC by successive
Governments. An independent inquiry is needed to see how this enormous amount of capital has been utilised. The Minister must satisfy himself—there are Government officials on the board—that, at the board's behest, the industry can work

within the current cash limits. He must satisfy himself about the rapidity of the turnover of current assets. That is central to the possibility of BSC operating within the cash limits.
I agree that it is important to get costs right, but it is also important to explain the falling away of the market. In addition to that, it is necessary to present the plans to show how BSC will win a much higher proportion of the market. We must not be baffled by the figure of £15 million. BSC must win a much greater share of the existing British market.
It is up to us all to do what we can. I hope that anyone who wants to make a new year resolution will resolve to put the British steel industry first when he considers the purchase of a motor car or anything else made from steel during the course of next year. Against that background, we must put the problems of the industry into perspective. I agree that £300 million is a lot of money, but on the aggregate turnover of BSC it amounts to only 5 per cent. We should, therefore, look at the whole picture against the background of the market and the strength of the pound and all the other problems of the industry.
The Secretary of State is wholly wrong to continue pushing BSC to make decisions within far too short a time scale and with no regard for the social consequences.

Mr. John H. Osborn: I am glad that my right hon. Friend the Secretary of State did not swallow the bait by taking on too much personal responsibility for British Leyland, shipbuilding, British Aerospace, the National Enterprise Board—including Rolls-Royce—and the control of coking coal. He has clearly stated that his task is not that of management. One of the tragedies is that Conservative Ministers, when they take up office after a change of Government, invariably find themselves caretakers of a Socialist-industrialist society. In a debate such as this, Opposition Members ask Conservative Ministers to pursue out policies that the Opposition know would be fatal.
In the debates in this Chamber on steel—particularly 10 or 12 years ago—it was always said that if a plant was


lifted up by the roots and looked at too often it would wither. The danger is that this could be happening now. There was mention of the role of management. I remember, some 20 years ago, Project Spear of United Steels. I chaired a meeting in Westminster Hall when a film on Project Spear showed that management and industry were able to work together. That was certainly a feature of United Steels of Sheffield at that time.
I agree with my right hon. Friend. Most of what is happening at present is, ironically, the legacy of the dead hand of Socialism over at least the past 14, 15 or, perhaps, 35 years. My right hon. Friend explained how, after the 1945 election, the steel industry was nationalised. He also covered the denationalisation period. At that time decision-making was moribund because the banks, the Stock Exchange and the institutions could not underwrite the capital investment in the 1950s for fear of what would and did happen in 1966 and 1977. At that time there was the Iron and Steel Board and, I remember, the Iron and Steel Federation. But now there is the unsatisfactory sight of the British Steel Corporation writhing on the ground like a wounded dinosaur. That is not a pleasant sight, because so many people's livelihoods are tied up with it.
During the intermediate period of the 1950s, commercial criteria could not prevail and, therefore, sound investment policies could not prevail either. I am afraid that these have been absent from the steel industry since I first visited Temple borough melting works in Sheffield and the blast furnaces of Stewarts and Lloyds as a student reading metallurgy in the early 1940s, nearly 40 years ago.
This debate has been a personal agony for me because I have suffered, as a manager and director of a steelworks, from some of the decisions that Sir Charles Villiers has had to take vis-a-vis bankers and the institutions and those who provide funds for industry. This time the institution is the State.
I have had to hold export markets and I well remember that at the time of the Benson report we hoped to have export markets that would give Britain a capacity of 35 million to 38 million tonnes of steel. Therefore, the sight of this prehis-

toric monster—the dinosaur—slow, ponderous, inflexible and ill-equipped to survive, gives no pleasure to any Member of this House. However, I stress to my right hon. Friend that that monster must not be allowed to die. It must not be killed, because the livelihood of so many people are tied up with it.
I well remember that during the Standing Committee proceedings on the nationalisation of steel my right hon. Friend the Member for Yeovil (Mr. Peyton) reminded me that "all Governments, including Conservative Governments, were incompetent. Therefore, the less they were given to do, the better." That was 15 years ago. Now it is too late. It is ironic that the national executive of the Labour Party is still trying to promote the growth of the corporate State. Has it not learnt that in Britain its record over 35 years has been catastrophic to jobs? My right hon. Friend the Secretary of State for Industry is quite right to dismantle the corporate State as soon as he can and to disentangle industry from the tentacles of Socialism that are threatening the jobs of so many people.
Lord Melchett, who was the first chairman of the BSC, was told by many in the industry that he was taking on an impossible task. I was able to tell Sir Monty Finniston that fact and he found that that was so. I am afraid that the heads of the State corporations are being given impossible tasks. One of the difficulties will be to find a successor to Sir Charles Villiers.
This House has had debates on Shotton, Port Talbot, Corby and even Scunthorpe which had such possibilities a few years ago as the Anchor Project Today, jobs are being lost everywhere. For too many years politicians, particularly Socialists and trade union leaders, have led the bulk of wage earners and many who are on the first steps of the managerial ladder up the garden path to a fool's paradise. The bulk of school leavers and students in our colleges and
universities also have been led up the garden path by their academic mentors. Too often, wealth creation in working industry is not thought to be a suitable career. Too often, young people regard education and a job when they leave school as rights. But the world does not owe the British people or British industry a living. Therefore,


nations, communities and groups of individuals must earn that living, whether in a mixed economy or the private sector.
Britain should have been the industrial dynamo of the European Community. After all, it pioneered the Industrial Revolution. During the war the British work force provided our munitions from 1939 to 1945. I am afraid that Britain has been too great a battleground for contrary political conflict, in the board room and on the shop floor. Possibly one-third of Labour Members support the NEC resolution extending the role of the corporate State and moving us towards a Soviet-style society where everything is owned by the State and everyone is employed by it.
Because of this, those who handle industrial pension funds—some of them in the steel industry or the car industry—trade union funds or investment from outside have found that investment in the British working man, his factories and his managers is a risky business. If investment in capital projects is so risky for private investors, is it right that the taxpayers' money should be put at risk?
I believe that until some of the integrity that I once had the privilege to work with as a young manager and the dedication of the skilled craftsmen and semiskilled workers returns, however good the product there will be a reluctance to invest because of unreliability. British industry will not buy British steel, because threats of strikes and uncertainties make a buyer lay off his purchases because he regards his source of supply as unstable.

Mr. Donald Coleman: The hon. Member is a prominent man in the steel industry and we all know his record. Does he not agree that the reputation of the trade unions in the steel industry compares with anything anywhere else in the world?

Mr. Osborn: The record of the steel industry has been impeccable. I would support the pleas of my right hon. Friend the Secretary of State that the trade unions, particularly in Sheffield, do not put at greater risk the jobs of those in the steel industry.
In Brussels and Paris last year I met salesmen of British Leyland cars. They told me that they could obtain the orders but they could not guarantee deliveries

because of unreliability of supply and even some doubt about the quality of inspection. Perhaps one reason for this is lack of discipline—an emulation of the confrontation to which hon. Members have become accustomed in our way of life in the House of Commons—and a willingness by a small group of people to turn their backs on their fellow workers, their own management and, above all, their customers.

Mr. Roy Hughes: The hon. Member claims to know the steel industry. There have been works such as Shotton, where there has been hardly a single industrial dispute in its history. How does he reconcile this with his theories?

Mr. Osborn: I ask the hon. Member for Newport (Mr. Hughes) to listen to those who buy British products. Among the guarantees that any salesman must give are those of proper production control, cost control and process control. He must also guarantee the quality that people seek. It is essential that in the steel industry one has an impeccable record in this field. The hon. Member has diverted me from the theme of my speech.
There are problems ahead. The hon. Member for Wolver Hampton, South-East (Mr. Edwards) is the president of the all-party common ownership group in the House and the common ownership movement. My right hon. Friend the Member for Farnham (Mr. Macmillan) believes in wider share ownership. The Minister of State is a great supporter of small businesses, and I, for one believe that smaller is more beautiful. Above all, it is important that independent directors should draw finance for long-term projects, as well as short-term projects, in an area where management can assert itself. Those Conservatives who met Sir Michael Edwardes last week were satisfied. Responsible citizens would expect the Secretary of State for Industry to do much more, but on second thoughts they realise that he cannot do so. It is for management and those who lead industry to try to lead Britain out of what The Economist of last week described as
The ugly face of British industry.
It points out that 60 per cent. of cars last month were imported. This affects


markets in Sheffield. It affects steel companies, forgers and foundries which rely on a domestic car market. Therefore, a drop in output to barely 1 million vehicles now, as opposed to 2 million 10 years ago, is bound to affect job opportunities.
I met Sir Charles Villiers and Mr. Robert Scholey last week. I was a manager in Sheffield, and I can understand the arguments they now have to put to my right hon. Friend the Secretary of State. I have been in their position of arguing for institutional finance and for longer terms. I agree with the right hon. Member for Rhondda (Mr. Jones) when he put the views of Mr. Muir of the Steel Industry Management Association:
BSC has moved from a stance of standing its ground in aggressive self-defence within a hostile economic environment, to acceptance of the inevitability of an ever-diminishing make of steel and a permanently maimed capability".
I have been in that position, and I have argued in that way in other instances. Even Mr. Peter Jost, in a paper on import controls submitted to the Royal Society, has expressed firm views on the subject. Ten years ago he supported much of the Labour Government's legislation at that time. His words on import control were:
In my view, most importantly, with the exception of temporary and/or very special cases protectionism of this kind has never in this country increased, but almost invariably adversely affected, industrial efficiency on which employment depends.
Sir Peter Carey has put forward his views on the encouragement of the entrepreneur and the engineering profession. There are various views on how the nation can extract itself from the present dilemma. However, unless the British people as a team—we are a manufacturing nation—can deliver the steel and engineering goods with reliability and with good quality control, the problems will continue.
British industry has its internal defects, but they must be resolved by British industry, including the British Steel Corporation. There can be an intolerable burden with too heavy a social overhead, requiring too much company and private taxation. It is right for the Government to dismantle this. The previous Secretary of State had too much on his shoulders.

The present Secretary of State has a great burden. He must continue to decentralise decision-making and take away control from Government. He must face up to further disengagement from the corporate State.
I hope that hon. Members will realise that diffusion of power leads to better participation and better consultation. It is the concentration in Whitehall that is strangling the chances of people maintaining jobs and employment in the steel and engineering industries and elsewhere. The events of the last 15 years must be reversed.

Mr. Roy Hughes: The smears against British workers spelt out by the hon. Member for Sheffield, Hallam (Mr. Osborn) cause positive harm to British industry, particularly the steel industry, and to our competitiveness in world markets. Many sections of the steel industry have an impeccable industrial relations record.
I wish to express my bitter resentment at the callous indifference shown by the Secretary of State for Industry to the terrible problems facing the steel industry. The attitude of the Secretary of State and some of his colleagues will register in the hearts and minds of steel workers and their families. The problems faced by the steel industry cannot be solved purely by market forces.
In the general election campaign, the future of Llanwern was a prominent issue in my constituency. I predicted that if a Conservative Government were elected Llanwern would be very much at risk. The Conservative candidate—I do not remember his name—took a huge advertisement in the local newspaper to repudiate what I said. He said that I was talking a lot of nonsense. Today the people of Newport can judge for themselves. They know who was being realistic and who was speaking the truth. My campaign was based on the concept that if a Conservative Government came to power South Wales would endure experiences similar to those of the 1930s. The proof of the pudding will now be in the eating. Thousands of people were conned at the time of the general election.
As my right hon. and learned Friend the Member for Aberavon (Mr. Morris) pointed out, South Wales is faced with


a catastrophic situation. The point I wish to make to some of my union colleagues is that the Iron and Steel Trades Confederation cannot carry the burden alone. I appreciate that the majority of members of the ISTC are in the steel industry. But there are other unions with a strong minority interest, including my own union, the Transport and General Workers' Union. I am chairman of its parliamentary group. I say to the members of the ISTC that these other unions have tremendous influence and power in many other sections of the British economy. The members of the ISTC will need full co-operation from the other unions if they are to be successful in their campaign against the closure programme of BSC.
In this difficult period for South Wales in particular, men of substance are needed, men of courage, men with backbone, who will stand and fight for their jobs—men who will not be knocked over like chocolate soldiers. This evil Government and the policies they represent must be resisted. Those who do so will be the real British patriots. This country needs a steel industry, and if it goes to the wall we shall be at the mercy of overseas suppliers in regard to prices and delivery dates.
Last week some colleagues and I visited the headquarters of the British Steel Corporation to meet its chairman, Sir Charles Villiers. One point that he made has remained with me. He said that the real damage to the steel industry was being caused by the mass of imports, not only of steel but of many other products composed of steel—cars, washing machines, and so on. He said that such imports were pouring in, eating up all our North Sea oil revenue and having a devastating effect on the steel industry.

Mr. John H. Osborn: Did Sir Charles Villiers stress another point which worried me and was in the BSC press statement last week? The growth rate in the EEC, excluding Britain, in the metal-producing industries and engineering has been considerable as opposed to the decline of Britain over the last five years. He pointed out that the steel industry and heavy engineering in other EEC countries, from their own and OECD statistics, were struggling to their feet.

Mr. Hughes: I certainly did not get that impression from Sir Charles. My understanding is that the steel industry the world over, and particularly in Western Europe, faces a massive recession and that there are all sorts of difficulties at the present time.
I am well aware that before Britain entered the Common Market there were many economic problems facing us—no one would dispute that—but two very important factors were working in our favour. One was that we were not bogged down by the common agricultural policy. We could purchase our food supplies in the markets of the world. Invariably they were relatively far cheaper than they are today, when our whole system is related to the CAP. The cheap food that we obtained had its effect on wage claims, which were lower than they are today. Our wage levels were lower than those of some of our principal competitors in Western Europe. Likewise, before we entered the Common Market, we still had small tariff barriers in this country. These two factors meant that our goods were still reasonably competitive in world markets. I know that the Germans were more efficient than we were, but, bearing these two factors in mind, our goods were still reasonably competitive.
It is becoming more obvious every day that eventually we shall have to get out of the Common Market. There were reports in responsible newspapers over the weekend that the Government were preparing emergency plans along these lines. Indeed, Conservative Members were tabling questions on this issue.
I am not only concerned about the £1,000 million or so that we are paying in EEC membership contributions. There is also the immense damage that is being done to vital sectors of British industry. We need import controls. I was glad to witness this afternoon the conversion of the Opposition Front Bench spokesman. It is a great step forward. My call for import controls for some years now has not been based on Bennery or Marxism. I have been trying to speak essentially as a British patriot, wishing to halt the flood of imports. This must be our objective. We must eventually scale them down.
Once our great industries, such as the steel industry, start to work to near capacity, we shall see the improvement.


When we recall the capital investment that has gone into great plants such as those at Llanwern, Ravenscraig, Scunthorpe, Red car and so on, we realise that if they are to pay dividends they must work to capacity. When they are doing that, their unit costs are reduced and they become more efficient. Surely that must be a better economic strategy than to pay out millions of pounds in redundancy benefits, unemployment benefits, and social security provisions of one kind or another.
At this difficult time, I hope that nothing irreversible will be done concerning either Llanwern or Port Talbot. We know that there is a very grave recession facing the steel industry throughout the world. There must now be negotiations between the British Steel Corporation and the principal unions in the industry at least concerning the third option which has been put forward, for a temporary scaling down possibly at these two major works. These are the only negotiations which should be taking place about the future of these two works.
Meanwhile, the Government should abandon their non-interventionist position and provide the money to tide over this vital industry during a very difficult period. Those who are even contemplating or acquiescing in the closure of these two great plants and their mutilation will never be forgiven by this generation or by succeeding generations.

Mr. Michael Brown: We all recognise the seriousness of the position facing the British Steel Corporation and British industry. No one appreciates the seriousness of it more than I do, representing a constituency where there are 17,000 people employed in the BSC plant at Scunthorpe.
There was an announcement two days ago to the effect that there would be about 2,800 redundancies at the Scunthorpe plant, which is one of the most efficient in the country. There is an acceptance—albeit a reluctant acceptance—on the part of the trade union side and management, the Government, and even to some extent on the Labour Benches, that a certain slimming down is inevitable.
At Scunthorpe, the plant is extremely efficient. The hon. Member for Newport (Mr. Hughes) referred to the relative

efficiency of the steelworks in his constituency as compared with Ravenscraig. We have to be careful with this sort of argument, because all plants in the BSC are to some extent interdependent. There is no doubt that considerable concern exits in the work forces, among whom there has been a good deal of pulling together over the last few months in order to try to assist the BSC. But, at the end of the day, what have they got? They have been offered a relatively small pay increase, and at Scunthorpe there are to be 2,800 redundancies, in spite of the fact that a half-year loss of £10 million last year was turned into a half-year loss for the equivalent period this year of only £5 million. Indeed, in the last quarter of the accounting period a profit of £500,000 was made.
The steel workers in my constituency have recognised readily that the Secretary of State for Industry and the BSC want to see a break-even point as soon as possible. The workers have therefore pulled together. But they are obviously concerned at what has happened. One can understand the reaction of steel workers who have done their utmost to accept their share of the burden. I believe that there is a realisation of the reality of the position, but there is a feeling that as long as they are one part of a large entity, however successful they may be, they still suffer with the rest of the corporation.
I fully recognise, Mr. Deputy Speaker, that this is not perhaps the moment at which to discuss the whole strategic future and organisation of the steel industry. We have to accept the position as it is and not as we would wish it to be. But perhaps the biggest indictment of nationalisation has come from the general secretary of the Iron and Steel Trades Confederation, a man for whom I have considerable respect, when he posed a question about the possibility of private capital in Corby and Shotton. One can almost hear the whispers beginning to sound rather louder among the work force that perhaps their individual steel plants should be more independently managed, on a competitive plant-by-plant basis, so that they can benefit from their own actions when they have helped to turn a loss into a profit.
The BSC is now doing what would have been easier and less painful had the


decision been taken two or three years ago. My right hon. Friend's general aim for the steel industry is correct, but there is a continuing duty—which I think he accepted this afternoon—to support the steel industry while it implements the rationalisation plan. There is a difference between the present and three or four years ago, when the Labour Administration continued to give blind support without regard to the industry's future viability.
The BSC is taking steps to put its house in order. There is some element of quid pro quo required, and there is a responsibility for the Government to stand by, almost as the midwife stands by, to ensure the delivery of the BSC's future viability. That must mean an acceptance of some continuing financial support—I may not be popular with my right hon. Friend the Secretary of State for saying that, but one has to face reality and the position as it is rather than as we wish it to be—and a continuing responsibility for assisting the day-to-day operations of the BSC beyond the specific cut-off period that has been set. My right hon. Friend has set a clear, correct aim for the steel industry, and he recognises—as I recognise and as steel workers of Scunthorpe recognise—that the best guarantee for its future is profitability in the short term, and as soon as possible.
The market has changed since my right hon. Friend set a target for the BSC. We must recognise that the high interest rate has not assisted the BSC. We have from the BSC today that which we did not have three or four years ago—a clear attempt to achieve viability. If the work force of 152,000 is to be reduced within a short time to 100,000, that means that for every three steel workers in the industry today there will be only two in eight or nine months. There is bound to be a certain inevitable dislocation of social cost which we, as representatives in Parliament, must bear. We all understand the difficulty of hon. Members who represent constituencies such as mine, where steel is the only industry. There is responsibility for the Government to assist in the short term.
I am not arguing against an attempt to rationalise. I and the steel industry in Scunthorpe have always recognised that viability for the future, and for the massive investment put into the Anchor

project, must mean some slimming down and some rationalisation. In the meantime, in my constituency and in other constituencies, there will be a substantial number of redundancies. I am fortunate in the sense that I represent a constituency where the infrastructure has already been set. In the South Humberside area there has been investment in motorways and in an airport. We now have the high-speed rail service. We have a responsibility to ensure that an alternative industry is provided in one-industry steel towns.
I have not always had a high regard for regional policy, but one has to accept that, while there is regional policy, and while there is assistance for surrounding areas that do not have the problems of steel towns, the Government have a duty—as my right hon. Friend the Prime Minister recognised this afternoon—to find some finance for remedial action.

Mr. Peter Hardy: My constituency has a clear interest in Scunthorpe. Does not the hon. Gentleman recognise that if the infrastructure is there and if existing investment in the steel industry is there, it would be ridiculous to try to find money for other forms of investment? Surely it would be wiser for the Appleby-Frodingham and the Normandy Park plants not to be operating at single vessel level. Would it not be much wiser to spend a small sum on improving the iron-making capacity at Scunthorpe so that it could benefit from the infrastructure and the current labour force?

Mr. Brown: I note the hon. Gentleman's remarks, but we have to face reality. We cannot continue to make steel and dump it in piles around the country if it is not being sold.
It is recognised that current capacity in the United Kingdom's steel industry could be increased if we did not have to face a 20 per cent. import penetration. One hesitates to use too much of the import controls argument. My hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) drew attention to the fact that we have the power in our hands. If we can deliver British Leyland cars to foreign countries on time and if the work force at British Leyland recognises the responsibility upon it to produce the cars, there will be a demand for British steel.


That will ensure that the massive investment in Scunthorpe and other plants can be more fully utilised.
As long as we have the coal miner imposing on the steel worker the price for his wage increase, and as long as we have the car worker feeling, to some extent, that he can get away with what the steel worker cannot get away with, one has to argue that the answer is in our hands.
I cannot ignore the fact that steel is coming into this country under Common Market regulations through the subsidies that are provided by, for example, West Germany for coking coal. I was pleased to hear my right hon. Friend the Secretary of State announce that discussions will be taking place between the National Coal Board and the BSC.
I should hesitate before saying that I wish to see coal imports, but if the coal miners and the NCB wish their industry to be protected, and if they wish to ensure continued production of coal, they have a responsibility to do their utmost to try to recognise through wage demands that the price of the coal supplied to the BSC is not so excessive that the BSC is forced to look to outside markets. I do not wish to see imported coal any more than I wish to see imported steel, and I recognise that similar logic has to be applied.
In Scunthorpe we recognise the limitations that are imposed by the current demand for steel. If we continue to be surrounded by areas that have development area status, Scunthorpe—which has 2,800 redundancies with which to deal—will find that it is unable to attract the industry that goes to Grimsby. When my right hon. Friend replies, I appeal to him to say whether he will be able to reverse the announcement that was made earlier this year concerning development area status for Scunthorpe. I ask him specifically whether he can give me some indication whether the assisted development area status that we had previously can be maintained and upgraded to development area status. I hope that my right hon. Friend will comment on that when he replies.
I have said that the coal miner and the car worker have a responsibility for the

situation in which the steel worker finds himself. I shall refer to one or two other nationalised industries which also have a responsibility. I quote from a document produced by the Steel Industry Management Association, which I read with great interest. One paragraph states:
In this country, BSC has been to some extent a captive market for NCB. Indeed, as is true for many UK wealth-creating enterprises, BSC is too much a captive market for a number of other public sector corporations and in its costs, Lames the penalties of GPO tariffs, electricity tariffs and British Rail freight charges. It is urged that Government should cross-check the reality or otherwise of subsidies by other EEC countries to their steel-making industries.
I endorse that sentiment entirely. Now that there seems to be considerable pressure building up in all sections of the steel industry, I ask the Government to deal with the difficult issue of coking coal subsidies and unfair subsidies that are being provided by other Common Market countries. The British steel worker is having to pick up the tab.
I am aware that time is against me. I wish that I could speak for longer. I have made some clear comments to my right hon. Friend and I look forward to his reply.

Mr.Gregor MacKenzie: That is the second speech that I have heard the hon. Member for Brigg and Scunthorpe (Mr. Brown) make in the past two or three weeks. I admire his dexterity in managing to remain on the tightrope between loyalty to his constituents and loyalty to his Front Bench. Having heard the interesting speech that he made two or three weeks ago, I took the precaution of glancing swiftly down the Division lists. I hope that when the House next divides on a steel issue the hon. Member for Brigg and Scunthorpe will put his money where his mouth is.

Mr. Michael Brown: The remarks that I made two or three weeks ago and today are entirely in keeping with the trend that my right hon. Friend the Secretary of State for Industry wishes to see for the British Steel Corporation. I have always accepted and endorsed the argument that there will be no future for the British Steel Corporation in Scunthorpe or elsewhere unless it is viable. I have merely stated to my right hon. Friend


that perhaps the time scale is not as short as he would wish.

Mr. MacKenzie: We shall have to wait for a few years—it may be a shorter period—and then the steel workers in the hon. Gentleman's constituency will be able to decide for themselves. I think that the steel workers in my constituency have already done so.
The hon. Gentleman said today that he has not always been too keen on regional policy. He used the word "reality" about half a dozen times. As a Member of Parliament for a steel constituency, he is now witnessing the reality of regional policy, which plays such an important part in the lives of so many hon. Members from Wales, Scotland and other parts of the United Kingdom.
The Secretary of State for Industry made an extraordinary speech. I do not expect the right hon. Gentleman to listen to all Back Bench speeches in the debate, but it would be nice if he appeared for a short time. He said a great deal today about his decision not to intervene. I do not believe that it is the responsibility of any Minister to breathe continually down the neck of management. However, Secretaries of State and members of the Government have a duty to intervene when they consider that decisions are being taken that will result in many thousands being unemployed. They have a duty to protect the quality of life. They have a duty to protect jobs. If the Secretary of State believes, as he said today, that his only task is to appoint the board and to let it get on with it, I must say that that was not the view that he took yesterday when we pressed him to declare his policy for the Post Office. He said that it was for the chairman of the Post Office to tell him who would go on the board. I am rather puzzled.
The Secretary of State must intervene in a situation where we shall have thousands and thousands unemployed. He intervenes in so far as he provides the broad general lines of policy. He sets out the financial limits within which the British Steel Corporation has to work. It is all very well for him to wash his hands of all these matters today, but many decisions would not have been taken if the right hon. Gentleman had not set such stringent financial limits.
I shall confine my remarks to an issue that concerns my constituency and the West of Scotland. I refer to the decision of the BSC to shut the Hallside works in my constituency. I hope that my hon. Friend the Member for Consett (Mr. Watkins) and others who had thousands of their constituents declared redundant on Tuesday will bear with me while I talk about the 580 jobs that are involved in the closure of Hallside. However, they will know that those redundancies are the last part of the cluster of similar redundancies that have occurred in my constituency and in the West of Scotland over the past few months and years. Within my constituency we have lost the Clyde Ironworks and thousands of jobs at the Clyde bridge works. More recently we lost jobs at the Toll cross works. My hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) has seen many jobs lost in his constituency. The West of Scotland once had thousands of steel jobs, but in my constituency it is now counting them in only hundreds.
The Secretary of State chides my right hon. and hon. Friends for not always being heroic when in Government. The Labour Government closed down what were regarded as obsolete steelworks. I was a Minister of State in the Department of Industry, and was saddened when the Government had to close an ironworks in my constituency. That was an unpleasant task. However, the decision was taken because we thought that it was the right thing to do. It was taken after we had made considerable plans for improving the infrastructure of the area and ensuring that other jobs would become available.
As I have said, I was saddened when my fellow Ministers in the Department of Industry had to take the decision to close an ironworks. However, there was one bright note in the Beswick report—namely, that we would keep the works at Hallside. The plant was to continue to operate well into the 1980s producing billets. Indeed, it was intended to increase its capacity.
My right hon. and noble Friend Lord Beswick took that decision because he knew that Hallside works was an efficient plant that produced good special steels. If the hon. Member for Sheffield, Hallam (Mr. Osborn) were in the Chamber, I should tell him that the works have an


excellent industrial relations record, an excellent delivery record and an excellent relationship with customers, most of whom are in the West of Scotland and fairly close to the works in my area. We now know that the work that is being done at Hallside is to be transferred to other places.
A relationship has been built up over many decades at Hallside. The closure will mean the loss of a great many orders. As the Under-Secretary of State knows, the closure is taking place in the West of Scotland at a time when the area cannot take any more. There have been closures in the steelworks and redundancies in our shipyards, and Massey-Ferguson and Singer have closed. A catalogue of closures accounts for thousands of lost jobs within the last few months.
The Secretary of State should be aware of his social responsibilities to the steel industry. Indeed, he is enjoined by Act of Parliament to take cognisance of them. Steelworks are like coal mines. They operate within small communities. As the hon. Member for Brigg and Scunthorpe said, many of them operate as single industries. When a plant in my constituency closes, a father and perhaps two of his sons and his sons-in-law lose their jobs. There is no point in saying, as a junior Minister in the Department of Industry said the other day, that those men should find jobs elsewhere. If the Minister were to come to Scotland, he would find it exceptionally difficult to find those jobs.
I have listened in debates about steel closures to discussions on Corby and Shotton and I heard the speech of my hon. Friend the Member for Kettering (Mr. Homewood) a few days ago. He was pressing for development area status and all the other aids that the hon. Member for Brigg and Scunthorpe said that he disliked. He mentioned such aids as selective financial assistance. I happen to represent a special development area, or a recovery area, which, I am told, is rather better than a special development area.
No matter how busy the Scottish Development Agency and BSC (Industry) Ltd. may be, the Government are not planning for growth within Scotland or the

United Kingdom. So long as the Government are not planning for growth, there is no point in special development areas, SFA and other aids, because the mobile projects will not be started. I hope that I am not being too pessimistic when I say to my hon. Friend the Member for Kettering that in my constituency we have gained a few hundred jobs but have never recovered—despite all the special aids—the thousands of jobs that we had in the past.

Mr. David Lambie: In the Garnock Valley in my constituency, where the open hearth steelworks were closed and where there has been tremendous activity by the SDA and by BSC (Industry) Ltd., we still have an unemployment rate of 19 per cent. In a so-called growth area such as Irvine new town in my constituency, the unemployment rate is 14 per cent.

Mr. MacKenzie: I am conscious of that. My hon. Friend will recall that when I worked in the Scottish Office I was conscious of the problems of the Garnock Valley. My colleagues in the Scottish Office were responsible for attracting a particular industry to go there at very high cost. That cost was criticised by Conservative Members, who were much more worried about the balance sheet than they were about jobs in the Garnock Valley.
What is the role of the BSC (Industry) Ltd? I think there is a good deal of potential for good in BSC (Industry) Ltd. In my area there is a small project called Clyde Workshops, which the Secretary of State's ministerial colleague will tell him about. That is a useful business which has produced 300 or 400 jobs. That shows that BSC Industries can do a great deal of good, but how can we ensure that it continues to do good? How is it to be funded, and will it be allowed the freedom to get on with the job that it enjoyed in the past?
My right hon. Friend the Leader of the Opposition asked the Secretary of State for Industry questions about finance today. I and many of my right hon. and hon. Friends did not understand the answers. I am left not knowing whether BSC (Industry) Ltd. will be properly funded over the next few months. It is


urgent that it should be funded and allowed to get on with an important job.

Dr. Bray: The Secretary of State specifically said that the refusal to finance the deficit did not apply to restructuring costs. My understanding is that BSC (Industry) Ltd. comes under restructuring and is therefore not limited by the Government's financial statement.

Mr. MacKenzie: I hope that my hon. Friend's interpretation of the words of the Secretary of State is accurate. I thought that the Secretary of State's answers were less than explicit.
I understand that guidelines were published yesterday about how the SDA will function over the next few years. It is a pity that these guidelines are not placed in the Library as such documents were in the past. It would be helpful if, instead of those statements being made in Committee, we could read them. However, I will look up the Committee report. Those of us who are genuinely interested in these matters have not had the opportunity of examining the guidelines.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): Copies of the guidelines were made available in Committee this morning and I understand that they are also available in the Vote Office today.

Mr. MacKenzie: I do not often miss such things. I looked for the guidelines particularly but must have missed them. I would certainly like to see them because in my area it is important that BSC (Industry) Ltd. and the SDA work closely together. What worries me about the SDA and BSC (Industry) Ltd. is that they have so many jobs to do. My particular interest and worry is the steel industry. Not only are we worried about steel in the West of Scotland, but we are concerned about our shipyards and about manufacturing generally.
How does the Secretary of State see the future of steel making in Scotland? In an intervention my hon. Friend the Member for Flint, East (Mr. Jones) asked the Secretary of State about the future of Shotton. He was told that he should address his question to the chairman of BSC. We cannot have the chairman of BSC at the Dispatch Box. I have always believed that it is the responsibility of the Secretary of State to carry the can
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in these matters. I hope that we shall have no more answers of that kind.
I want to know about BSC not from its chairman but from the Ministers. How do they see the future of the steel industry in Scotland? They are the people who fix the financial limits. How do they see the future of Clyde bridge, which is the only steel plant left in my constituency? I know that my hon. Friends the Members for Motherwell and Wishaw and for Central Ayrshire (Mr. Lambie) will want to know about the steel plants in their areas.
May I ask the Under-Secretary—if his right hon. Friend is unable to reply—to write to me and my hon. Friend the Member for Motherwell and Wishaw? We are concerned that the closure of Hallside steelworks should not affect the future of Craigneuk, on which our constituents are heavily dependent for jobs.
A novel suggestion made by my right hon. Friend the Member for Rhondda (Mr. Jones) was that we should make the Secretary of State for Industry Secretary of State for Social Services. However, many of my colleagues think that the right hon. Gentleman was not a huge success in that Department in days gone by.
The trouble with the Government is that they are too compartmented. The Secretary of State believes that, no matter how many people lose their jobs, he must balance his books. He believes that everything must be neat and tidy financially, irrespective of the social consequences. Perhaps it would be a good idea if the Secretary of State for Industry were made Secretary of State for Social Services because then he would know exactly how much had to be spent on social benefits and supplementary benefits. I believe that about £200 million a year will have to be paid in benefits if the planned redundancies go ahead. I am no economist, but I know that it is crazy to close works, deny people jobs and pay vast sums of money to keep people on the dole. As a simpleton, I regard that as being absolutely crazy.
I do not understand the Secretary of State's attitude. Does he want a steel industry in the United Kingdom at all? We certainly do and the steel workers certainly do. If he does, he is going the wrong way about it.

Mr. Raymond Whitney: The right hon. Member for Rutherglen (Mr. MacKenzie) has painted a gloomy picture of the prospect for, and the present conditions of, the West of Scotland. He was joined by many of his hon. Friends. There is no one in the House who does not share the anxiety expressed by Opposition Members. However, this situation did not arise on 3 May. It is the result of a long-term process of which all of us have been aware. It seems from newspaper reports and statements by Opposition Members that a new word has been discovered—de-industrialisation. This is a prospect and threat of which hon. Members have been aware for many years. It was understood to be the basis of the last Government's policy on which they founded the so-called industrial strategy, of fond memory. Long hours were spent discussing the industrial strategy in the House and in the sector working parties. They achieved virtually nothing.
We should approach the problem constructively. None of us does the nation or the industry a service when we pretend that the situation is the product of political change. The problem is fundamental and we must all grasp it.
The policies followed in the years preceding the election on 3 May did not produce the answer. They did not cure the disease of de-industrialisation—rather, they hastened it. I offer the House two short statistics from the industries which are the subject of our debate. I am proud to say that I married into the mining industry. Although I have no connection myself with that industry, I do not feel as much on foreign territory as some Opposition Members accuse me of being. The South Yorkshire coalfield is well known to me. Indeed, I have told Arthur Scargill that I have had more pints in the miners' welfare club than he has. In fact, Mr. Scargill drinks halves. The Department of Energy figures for the coal industry show that in 1973 the average output per man-shift was 2·29 tonnes. In 1978 it was 2·25 tonnes. There is not a big difference, but when one considers the investment and effort nut into the National Coal Board over those years those are significant and important figures.
The man-hours per tonne in the West German steel industry were 5·9 in 1978, in France 6·4 and in the United Kingdom 10·9.

Mr. Homewood: Such comparisons must be made with reservations. A document is being circulated containing an enormous list of jobs which relate to the steel industry. Many of those jobs are not included in the calculations in Germany, France or Japan. The document concludes that the difference in the steel industry in Germany and in Britain is only marginal.

Mr. Whitney: I accept that. The man whom I call my deceased constituent, Mr. Benjamin Disraeli, once repeated that there were lies, damned lies, and statistics. I should be surprised if the statistics for man-hours per tonne in the steel industry make a fundamental error. The same argument cannot be applied to the coal industry. I am talking about the British industry and British investment. In the five-year period, output per man-shift fell.

Mr. Allen McKay: If the hon. Member for Wycombe (Mr. Whitney) quoted face tonnes per man-shift, he would find that the figures have increased tremendously in the coal industry. He is quoting overall figures.

Mr. Whitney: We are back on Mr. Disraeli's territory. The traditional British industries have serious problems which must be tackled in a national spirit. Where there is unfair foreign competition, I look to my right hon. Friends to tackle that. We hear much about coking coal. I assure Opposition Members that overseas competitors look hard at the type of financial support that we have given to our own industry. From across the Channel that support looks like subsidy.
The majority of people understand what is happening. They understand that there is a real and fundamental problem. The trade unionists understand, as they are showing in vote after vote when they are given the opportunity to express an opinion. The majority of industrialists also understand.
Of course, there is worry about the relatively high pound. The high interest rates


are bitterly disliked. Above all, the industrialists are worried about low productivity, which is the fundamental problem. The alternatives have been tried. No solutions have been offered from Opposition Members except those that were tried in that depressing period which ended on 3 May. We must bring the country back to realism. The majority understand the necessity of that and that it will be painful. They are ready to accept a gradual but steady return to reality, which is being led by my right hon. Friend the Secretary of State.

Mr. David Watkins: Having listened to the speeches by the Secretary of State and the hon. Member for Wycombe (Mr. Whitney), I am strengthened in my conviction that I should support the motion to reduce the Secretary of State's salary. At the time when the British Steel Corporation needs help and support, it is being dogmatically, ruthlessly and almost contemptuously brushed aside. This has been the policy of the Government since they took office, and that was
reiterated without the slightest variation by the Secretary of State this afternoon. As my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) pointed out in a letter published in The Times on 5 December, the BSC is being forced into cataclysmic closures. Those closures were contemptuously dismissed by the right hon. Lady the Prime Minister at Question Time this afternoon as being long overdue.
Nowhere will the effects of that policy be more cataclysmic than at Consett, and I intend to devote the rest of my speech to dealing with the situation in my constituency, though I do not propose to delay the House for too long. I can only say that the closure of the steelworks at Consett is an act of industrial vandalism which will devastate the area. Like my hon. Friend the Member for Newport (Mr. Hughes), I too made it one of the main planks in my platform at the general election that the election of such an extreme Right-wing Tory Government as we now have would certainly mean the closure of the steelworks at Consett; and it gives me no joy whatever to be proved right when the consequences for my constituents are so disastrous.
I have described this closure as an act of vandalism because it comes at the very time when the works at Consett has been made viable. That state of viability has been achieved only after years of difficulty and sacrifice by the people involved in steel manufacture in the town. Apart from that, ten of millions of pounds have been spent on modernising the plant. We are talking about the shutting down not of some old, clapped-out works but of a modern and productive plant. This greatly emphasises a point made by so many of my hon. Friends, including my right hon. Friend the Member for Rhondda (Mr. Jones), about the necessity for an inquiry into the investment programme, how and why it was designed and what has been the net result of it.
This is a plant where, with the full co-operation of the trade unions, the work force has already been reduced from 6,200 to 3,700. That of itself was a traumatic experience for a community which is so heavily dependent upon a single industry—because the town of Consett is a one-industry town. Just a few weeks ago the plate mill was closed, with a further 420 redudancies. The hon. Member for Wycombe spoke about the realisation of the problems within the industry and among those who are involved, and that is absolutely true. It was recognised in my constituency that the plate mill was a loss-maker and had been for a long time, and, because of all kinds of circumstances which could not be controlled locally, it could not be made into a profitable proposition.
Even before it went, however, the rest of the works was becoming viable, and since the closure of the plate mill the plant has been operating at a growing monthly profit. The figures are publicly available for everyone to see. Every recent week has brought announcements of record production at Consett. So here we have a works which is running profitably at a high level of its capacity, showing that there is a market for its products. Yet at the very time when the investment, the sacrifice and the co-operation of years are producing results, at the very time when the Secretary of State's own criteria of competitiveness and profitability are being met, the whole works is to be shut.
I have said that this is an act of industrial vandalism, and those are the


reasons why I describe it as such. It is an act which will devastate the town of Consett. I will refer to some of its effects. Consett is relatively a geographically isolated community where there are no alternative sources of employment, an area where the male unemployment rate at the last count was 11.3 per cent. and rising. As many as three-quarters of all people who are now in work maybe out of work due to the closure of the steel industry, and the ramifications of that will be immense. No other word can be used to describe them.
Every retail business, not only in the town of Consett but in surrounding villages where large numbers of steel workers' spending power, now faces bank-area which is dependent upon the steel workers spending power, now faces bankruptcy. In my constituency there are companies in industries such as construction and road haulage in particular which are totally dependent, for their existence, on their permanent contracts with the British Steel Corporation. They, too, face bankruptcy. The railway line from Consett to Tyneside which has been kept open, and kept busily open, because it is necessary to serve the steelworks, obviously faces closure. This is a freight line only but it faces shutdown at the very time when there have been informal talks on the possibility of reintroducing a passenger train service, a possibility which has now gone by the board.
There is another effect. The loss of rateable value and income to the county and district councils will be catastrophic and it will bring cuts to essential services of unimaginable severity. Surely this must count as one of the most cataclysmic closures of all those which we are debating today. This works is being closed even though it is meeting the Secretary of State's own criteria of viability and competitiveness. This morning I met Sir Charles Villiers, the chairman of the British Steel Corporation, and everything that he told me, and for that matter everything that I hear elsewhere, indicates that there is to be an early shutdown and that it will take place in the early part of the next financial year.
There is such a sense of anger and frustration amongst my constituents that they will not be prepared to take this lying down, and yet the community of

Consett can survive this immediate catastrophe only with Government intervention. In the first place, with the imminent closure of such enormous consequence they must have time. Therefore, notwithstanding everything that the Secretary of State said, I call upon him to issue a directive to the BSC to reconsider this closure in time for something to be done.

Mr. David Crouch: The hon. Gentleman is arguing fundamental points about the steel industry in regard to Consett, but he has told the House that Consett is now viable. He has told us that he talked today with Sir Charles Villiers, and then he spoke of the need for Government intervention. What did Sir Charles Villiers tell him? Did he tell him that it was viable? Did he tell him that it did not have to close or did he tell him why it had to close? Or did he say it needed Government intervention, and, if so, why?

Mr. Watkins: Sir Charles Villiers gave meno answer to any of those questions. He made it absolutely plain that the works will close, and close early. The figures of viability which I have mentioned are available and have been published by the British Steel Corporation, so my reason for calling for the intervention of the Government is that the decision of the BSC needs further looking at, and a further overruling if there are not to be the most catastrophic consequences in my constituency.
BSC (Industry) Ltd. is already working in Consett and is pulling out all the stops to try to attract new industry to the area. Only today, as this debate has been proceeding, BSC (Industry) Ltd. has been holding what obviously will prove to be a crucially important seminar in Consett, discussing its functions and the problems of the area. But its resources are limited. It cannot cope without an injection of public money to provide factories, roads and all the necessary things to build up new industries. I say to the hon. Member for Canterbury (Mr. Crouch) that Sir Charles Villiers agreed with me on that when I spoke to him this morning.
I referred earlier to the provision of alternative industries. In Consett there is a small number of empty advance factories, plus two which are under construction. Yet, even if those empty advance


factories and the new ones when they are completed became fully occupied, they could provide only 300 jobs—pitifully inadequate in an area where nearly 4,000 people in steel alone and others in related industries face unemployment within months. Therefore, greatly increased expenditure is required not to bail out the area but to help it to help itself.
My constituents and I want all the resources of the area to be mobilised through the creation of a task force specifically to do that. I shall be discussing that matter in my constituency at the weekend. But that could work only if help is given, because the level of local resources is not adequate. If any help is to come from the European Coal and Steel Community, it will come only if there is British Government initiative first to ensure that British help is made available to the area.
I understand that the Secretary of State for Wales is to reply to the debate. That is interesting in more ways than one. Since the 1880s my constituency has had a number of Members with Welsh connections. That is not excluded from the present representative of the constituency, because his family roots are considerable in the Secretary of State's constituency, to which I am a regular anonymous visitor at holiday times.
Notwithstanding the totally negative speech by the Secretary of State for Industry earlier today, I call upon the Secretary of State for Wales to consider issuing a directive to the British Steel Corporation to reconsider the closure of the Consett steelworks and to face his responsibilities by stepping up Government help to the area so that it may help itself. That is what the area needs. It can survive only if it has that help.
This afternoon we heard from the Secretary of State for Industry the negative, irrelevant response to which we have become only too accustomed. I hope that at least in the winding-up speech by the Secretary of State for Wales we shall hear something more positive. If not—if all we get is yet another repetition of this negative response—it will show that the Secretary of State for Industry deserves the censure not only of the House but of the whole country.

Sir Anthony Meyer: The hon. Member for Consett (Mr. Watkins) has my sympathy for the plight in which his constituency finds itself. It is a plight which the hon. Member for Flint, East (Mr. Jones) and I have endured for many years. A grim prospect faces the constituents of the hon. Member for Consett.
This seems to be a steel debate, but there is nothing on the Order Paper to say that is so. I do not intend to speak for any great length of time, but I propose to range a little wider than the subject of steel, as did my hon. Friend the Member for Wycombe (Mr. Whitney).
During the long years of the decline of the British economy we have got used to the idea of sliding down an increasingly steep slope, but we have asked "Where is the precipice?" There did not seem to be a precipice. But I have a nasty feeling that we are about to go over the edge of that precipice.
The figures for productivity, inflation and production in the steel industry and for the import of cars compared with those of our competitors are frightening. We have had five years of almost nil growth, five years of no increase in production since the three-day week.
We now face not just an employment crisis—an employment crisis of a sickening magnitude—but a survival crisis. This country must be industrially competitive if it is to feed its own people. The very capacity of our industry to earn us enough to keep our people reasonably fed is in question. That is the measure of the problem that we face. It is aggravated by the fact that what is economically inevitable is politically unacceptable. The laws of economics will not bend, so the laws of politics will have to do so.
It would have been nice to hear some recognition from some Opposition Member of the drastic changes in outlook that will be necessary. For example, it would have been nice to hear somebody deplore the action of the Iron and Steel Trades Confederation, which up to now has been one of the most moderate and responsible of unions, in calling for a general strike in the steel industry, not to protest against the closures but to reject a proffered pay


increase of 2 per cent. from an industry that is in the throes of violent contraction.
I believe that it is right and necessary for the Government to intervene in the economy in such a way as to sustain a higher level of employment than market forces by themselves would produce. But those very market forces, which could in due course take up the slack and take advantage of a large pool of unemployed labour in the United Kingdom, are discouraged from doing so because of union insistence on depressing productivity and exerting monopoly bargaining power for wage increases which inhibit job creation. The unions and their supporters in the Labour Party must choose whether they want more jobs or pay packets bulging with banknotes which daily lose their value.
The Opposition accuse my right hon. Friend of being dogmatic. But they are the dogmatists—the Bourbons of national socialism, the Bourbons who learnt nothing and forgot nothing, the national socialists who are unable to envisage the solution to any problem in anything wider than purely national terms.
The Opposition accuse my right hon. Friend of going too fast, of insisting on British Steel breaking even at too early a date. It is a question not so much of too fast but rather of too late. Because it is too late, it has to be done too fast. None of us would wish to see British Steel compelled to break even in the course of the next 12 months. Few of us believe that it will be possible for it to do so. Indeed, few of us can regard the present proposals as other than a cobbled-up solution to meet an emergency. But matters could not go on as they were.
The hon. Member for Flint, East, put up a valiant battle to retain steel making at Shotton, and I gave him what support I could. I wonder what the verdict of history will be on our efforts. Will history say that with the very best intentions in the world we rendered the worst possible service to our constituents by delaying for five years the rundown of steel making at Shotton? If that rundown had begun in 1975, as was envisaged in the original strategy, who can seriously suppose that Ford would have gone to Bridgend? It would have gone to Deeside.
That putting off of vital decisions has been the most catastrophic consequence of the Labour Party's policies. Now what? There is a need for flexibility, and I hope that my right hon. Friend the Secretary of State will demonstrate such flexibility. The most fruitful direction in which to look for the many thousands of jobs that will be necessary it is in the service industries. It is therefore disturbing that, under present provisions in assisted areas, service industries are not eligible for the full investment aid that goes to manufacturing industries. For example, there is a firm in my constituency, Iceland Foods, that wishes to expand within the Deeside industrial area. However, it will get no help because it is a service industry rather than a manufacturing industry. In replying, I hope that my right hon. Friend will indicate that he has taken that factor into consideration.
The answers to our problems are more than nation-wide. It will take a massive effort, on a more than national scale, to reconvert industry. Industry is becoming obsolescent, not only in this country but throughout the whole of the Western industrial world.

The Secretary of State for Wales (Mr. Nicholas Edwards): My hon. Friend the Member for Flint, West (Sir A. Meyer) is not right when he says that no aid is available to service industries. I visited the Deeside industrial park about a week ago and found a number of successful service industries already established in the advance factories that have been built there. They are providing jobs.

Sir A. Meyer: I am glad to hear that, but I was told by Iceland Foods that it did not get the same degree of assistance as it would have got had it been a manufacturing industry.

Mr. Alan Williams: In March of this year I introduced a revamped scheme to give aid to service industries. That scheme gives £6,000 for every new job created in a special development area, £4,000 per job in a development area and £2,000 per job in an intermediate development area, with other back-up funds available.

Sir A. Meyer: I am grateful for that information. Iceland Foods was not


aware of it, and I shall see that it is so informed.
I am glad that there has been a switch in emphasis, but it must be further accentuated. It is in the service industries that the best chance of creating jobs lies.
These problems need to be solved on a wider than national scale. The whole Western industrial world faces a crisis of over-capacity and obsolescence in its manufacturing industry. The only long-term answer is to raise the purchasing power of the Third world. That is something that is beyond the capacity or conception of any national Government. That is why it is so deplorable that the Labour Party, which claims to be the party of internationalism, has nothing to say on this subject. It is not only the most important issue of our time but the one hopeful avenue for the future.

Mr. Anderson: Whatever the merits of that proposal, it is a long-term solution. The de-industrialisation of Britain, and the EEC as a whole, is going on at a great pace and is aided and abetted by the strict monetarist policies of the Government Front Bench.

Sir A. Meyer: If the process of recon version had begun when the 10-year strategy of the British steel community was first mooted, we would not be in the difficulties we are in now. I know that it is a long-term solution and a large-scale solution, but that is not a reason why it be put on the shelf and forgotten. It requires extensive international cooperation if it is to succeed.
It is precisely because my right hon. Friend has an understanding of those wider issues, and is prepared to think in other than purely parochial terms, whereas I detect nothing but the merest parochialism from Labour hon. Members, that I shall have no hesitation in voting against the motion.

Mr. Alan Williams: In opening the debate the Secretary of State gave us a sermon on competitiveness. Although all of us would agree that we are in favour of greater competitiveness within British industry, the Secretary of State must understand that it is unfair to expect British Steel to be competitive when unsubsidised against imports that

are taking its market because they are subsidised.
The Secretary of State refuses to recognise that reality, although hon. Members on both sides of the House have spoken in confirmation of it. There is a tendency to see productivity as an illusory touchstone that solves all problems. Strangely enough, as a former Minister of State, Department of Industry, I am in favour of higher productivity. However, that is not necessarily the answer to these problems, because productivity has to be purchased. Germany may produce 50 per cent. to 70 per cent. more liquid steel than we do in relation to manpower, but it also pays its labour twice as much. The Dresdener Bank carried out a survey of German manufacturing industry during the summer of last year which showed that unit labour costs in Britain were only 83 per cent. of unit labour costs in Germany. That is important.
One of the reasons why we have been able to attract American, German and Japanese companies is that, although our productivity is low, it is more than offset by the costs of our labour. Therefore, although it would be desirable to have higher productivity in the steel industry, let us not think that that productivity is a causal factor of our troubles. Although it has higher productivity, France is losing twice as much per tonne of steel produced as we are. I am not against productivity, but it is not a causal factor as regards steel.
The Secretary of State has continually stated that he does not intend to intervene. However, it was a policy intervention that led to the disaster we are discussing today. He gave a new and impossible remit to the steel industry that it must break even by April next year. Because of that, we face the prospect of closures and a job loss of 50,000 in the industry. Since that remit was given, circumstances have changed, and fulfilling the remit has become even more impossible since those changes, which are the result of other Government policies.
For example, the pound has been allowed to rise very high. I remember that when I defended the Labour Government's policy I was berated by Conservative Members because the pound was too high at $1·90 and $1·95. However, the pound is now at $2·17 and $2·18. It is because sterling has been allowed to rise


to a non-competitive level that British Steel is losing domestic markets to imports and has had to write off a 2 million tonne export market. British Steel is uncompetitive for currency reasons, not because of the cost of production.
Much of the market decline to which the Secretary of State referred is not the fault of British Steel but is a consequence of the budgetary policy that is being pursued. The policy that has been pursued for the last six months has caused the Treasury to announce that there will be a 2 per cent. decline in gross national product and activity in this country. We all know how such a decline focuses, in terms of lost demand, on the basic industries of coal and steel.
Therefore, the Government's currency and budgetary policies have contributed to the BSC's loss of market. A third factor that the BSC could never have foreseen, particularly if it had listened to the Prime Minister and the Chancellor, is the interest rate policy.
As hon. Members know, companies have started de-stocking. Companies that were holding steel stocks are now using them up and not replacing them. They are running them down to the minimum levels in order to avoid the service charges on the capital that is tied up in those stocks. That is the result of the penal interest rate that has been adopted, but it has added an extra dimension to the cut-off in demand that has hit the British steel industry.
Therefore, since the remit was given, three elements in Government policy have made it even more unattainable than it was at the outset when we warned that it was utterly impossible to achieve. What will the Secretary of State do when British Steel does not break even next year? He was very careful to trot around that question. If the losses in the second half of this year are bigger than they were in the first half, and if those losses will be more than £150 million in the next six months, what chance will there be that British Steel will be able to break even in the following financial year? There is none whatever, particularly with the economy running into decline.
What does the right hon. Gentleman intend to do? Is he seriously saying that the Government will do nothing to fund

those losses? What will happen with regard to wages and the payment of suppliers? Will suppliers be pushed into bankruptcy because the Secretary of State stands by his Calvinistic enthusiasm for monetarism? We all know very well that that will not happen, because it will not be allowed to happen. The fact is that we are seeing the most cynical political operation. The Secretary of State is deliberately sustaining the pretence that there will be no financial support towards losses next year in order to rush through rapid closures in the current financial year. We shall then get a humanitarian conversion of the right hon. Gentleman after he has achieved the closures that he wants at this stage.
The closures themselves are disturbing, and I accept that they are inevitably disturbing to all hon. Members. But, if the closures are frightening, the repercussions are terrifying, because one gets the reverse multiplier. One does not just lose 15,000 steel jobs in Wales, or 50,000 throughout the country; one loses as many in the coal and supplying industries because the purchasing power of those who are unemployed is reduced. Therefore, we are not talking about a 15,000 job loss in South Wales. We are talking of a job loss well in excess of 30,000 if these proposals are allowed to go through.
Yet, in one of his little philosophical asides, the Secretary of State accepted the duty to remedy the consequences of industrial change. But he is doing the exact opposite. At the very time when our steel-producing areas will be most in need of the financial assistance that was available under the regional policy of the Labour Government, the present Government arc running down that policy. For example, in West Glamorgan, which may experience the major job loss, there has been a massive de-scheduling of areas within the old assisted area. It is essential to West Glamorgan that the area again be raised to SDA status very quickly. But even if that happens—even if full assisted area status is restored—it will not put those areas back into the position in which they would have been in May.
Regional policy will never be the same because of another aspect of the decision that has been taken by the right hon. Gentleman. He has virtually abandoned the negative element of regional policy


outside the assisted areas by saying that one can build up to the size of 50,000 sq. ft. without an industrial development certificate. At a time when, because of a budgetarily induced recession, there will be fewer fish to catch, most of the few fish that there are will be found in the South-East, because the Secretary of State's net will not be able to reach them. They will not have to apply for IDCs. Therefore, other regions of the country will have less chance than they ever had at a time when they most need job creation.
If Conservative Members think that that is an unfair expectation and that I am being unduly depressive about it, let them look at what is happening in Slough. Many of us have good reason to remember Slough as the area to which many of our miners had to march in search of work during the inter-war years. Slough has a 3 million sq. ft. factory building programme already, and it is thinking of expanding it because of the changes that have taken place in industrial policy. During the recess, Bristol announced that because of the great advantage that it had now secured by the running down of assisted area support for Wales, it would have a special promotional campaign because it has a greater chance than ever of attracting more of the industry that would have gone to Wales. I am not surprised that Bristol feels that way, because, in respect of an IDC that I refused to give to Marconi for 1,000 jobs just south of Bristol, the Secretary of State for Wales succumbed to the Secretary of State for Industry and granted that IDC almost as soon as the Tories came into office.
There is another problem. We share the agonies that people in Corby are going through. But let us not underestimate the challenge that Corby, with assisted area status, represents to the North, to South Wales, to Lancashire and to Merseyside. With assisted area status, Corby has a massive locational advantage over the areas that most hon. Members taking part in the debate represent. I do not begrudge Corby replacement employment. All I am saying is that what is happening in the non-assisted areas—in Slough, Swindon and Bristol—and what will be happening in Corby will make it even more difficult than it need be for us to solve the problem that has

been imposed upon us by the right hon. Gentleman.
The consequence is that we shall return to the conditions of the 1930s. We shall return to the days when the young flooded out of the North, the North-West, Yorkshire, and Wales down to the South and South-East. That is inevitable. It is not only the young who will be forced out. A new and insidious problem is developing in our areas, because the skilled are being bribed out.
Only last night, the television news showed skilled Newcastle workers—and we know how scarce skilled workers are—being offered housing in Norfolk in order to leave the North and bring their skills further south. A few weeks ago, either the Evening Standard or the Evening News ran an editorial congratulating another South-East local authority on attracting Scottish skilled workers by offering housing in order to bring their skills out of the assisted areas into the South-East where there is a shortage.
Yet the area in which there is a shortage of skilled labour is the very area in which industrialists will be set absolutely free to build factories as they wish, totally outside any Government attempt at regional control or diversion. As a result, hon. Members in other areas will face the problem of ageing populations at the very time when our young people and skilled workers are filched from us in order to feed the South-East's appetite for industry, the needs of which it cannot meet in terms of skills.
The Secretary of State has condemned Wales and other areas to a decade of continuous decline and to a period of industrial devastation. He will never be forgiven in Wales and he will never be forgiven in the other assisted areas. In a few years' time. I doubt if he will forgive himself when he sees what he has done.

Mr. Deputy Speaker (Mr. Bernard Weatherill): Before I call the next speaker, I remind the House that an hour remains before winding-up speeches. There are 14 hon. Members who wish to catch my eye, and a appeal for brief speeches.

8 pm

Mr. Kenneth Carlisle: In this debate, it must be made abundantly clear


that all hon. Members hate unemployment. It is and always has been one of the great enemies of a good society. Opposition Members are misguided if they attack the Government on that score. Results in the long term matter, and they will be the first to recognise that their record has not been spotless. The House is united in its detestation of unemployment. However, what divides us is the way that we seek to cure that evil. The Opposition believe that subsidy and Government expenditure are the key. On the other hand, we realise that there can be no substitute for productive and competitive businesses. The right hon. Member for Swansea, West (Mr. Williams) said that productivity was not enough. I agree with him. We want the power to compete effectively. Productivity is just one element that goes into making up the power to compete.
Our wealth is created by productive and competitive businesses and by those who work in them. The Government spend the wealth. In the nineteenth century, our prosperity sprang from our ability to compete with a host of countries throughout the world in providing world markets for cheap textiles and other manufactured goods. Likewise, today, Japan's success stems from her ability to compete in a range of high-technology goods. Success at producing competitive goods and services is at the heart of good employment. A sad but significant example of that is shipbuilding.
At the end of the war, in the late 1940s, Britain had over 40 per cent. of the world market in ships. Today, we have less than 3 per cent. That decline occurred for a variety of reasons. We failed to modernise and compete. Our productivity fell way below that of our main competitors. One of the reasons for our failure to modernise was the understandable wish to preserve jobs in the shipyards. Traditionally, they are areas of high unemployment. But the regrettable result of that policy is that fewer people will be employed in shipbuilding than there would have been if we had gone flat out over the past 30 years on modernisation and productivity.
I fear that the same mistakes have been made in our car and steel industries. In both industries, the productivity of our

main competitors is at least twice ours. As we know, the steel industry is depressed world-wide. Car sales, on the other hand, have never been so buoyant in the United Kingdom. Yet British Leyland's share—about 16 per cent. of the market—is half of what it was only a few years ago. As a result, BL has to make many redundancies. Again, the lesson is quite clear. Without the ability to compete, no jobs are safe.
If the Government are to save jobs in the long term, they must take steps to make all our large nationalised industries competitive with our overseas rivals. That task is made harder by the disruption caused in those industries by the programme of nationalisation over the last few years. That programme was promoted not because of commercial realities but to fulfil political dogma. All hon. Members accept that steel, which has been used as a political football, has been highly damaged by nationalisation, denationalisation, reorganisation and the rest.
The failure by Governments, especially in the last five years, to allow management to carry through measures to promote change and better competitiveness has made it much more difficult for those industries to get on a sound footing and it has made the steps to reform them that much more drastic. If a garden is untended for five years, it takes much more effort to restore it to a semblance of order. The effort is much greater than if it had been tended carefully and kept up to date each year. Unhappily, so it is with the State industries.
The task facing the Government is formidable. They would be failing Britain if they were not determined to reduce the losses of the nationalised industries, which are a burden on all other activities in the country. The losses being made by steel, shipbuilding and coal this year are equivalent to about lip on the rate of income tax. We should ask ourselves what right the industries have to continue to be supported by the tax-paying British public, especially, as history suggests, if those subsidies encourage the industries not to become competitive. It leads, as we have seen, to a reduction of jobs that will be available in the long term.
In the long term, my right hon. Friend the Secretary of State for Industry is


doing the country a service by making the basic industries face up to their competitive decline. The sooner we face realities, the sooner we will be able to improve our performance. The sooner we become fully competitive, the more jobs we can salvage. Decisive action now means jobs in the long term. We all want jobs. On that matter, all hon. Members are united.

Mr. Peter Hardy: I shall endeavour to be brief, Mr. Deputy Speaker.
What has astonished me so far in the debate is that several Conservative Back Benchers have stressed the need for British industry to build up a good record of deliveries. BSC is urged to improve its quality and its deliveries. If BSC is to deliver, it must produce. BSC will now have to suffer a remarkable cut in its capacity to produce. Therefore, Britain is faced with an enormous increase in its requirement for imports.
Some hon. Members may envy the position of South Yorkshire. We are not immediately threatened. However, I believe that the Government's policies could put South Yorkshire in the position of Consett today and Corby yesterday. We are not out of the wood. The Under-Secretary of State knows the position in my area. We have a successful record in that we are one of the most successful steel undertakings in Western Europe. For the last three or four years, we have been consistently breaking world records, yet we find the going ever more difficult. It is more difficult for the reasons that some of my hon. Friends have already given.
We face competition with an exchange rate that is a great impediment. If Government policy persists, our difficulties will be intensified. I do not believe that the Government should take the short-term view that they are taking. They are looking no further than the development of the next oilfield or the flaring of the next trillion cubic feet of gas. Tomorrow at 4 pm I shall collect my youngest child from infants' school. When I look at that child and the others who come out of his classroom, I hope that I shall bear in mind the fact that by the time he is able to leave school at the statutory age of 16 our oil and our gas

will have run out and the basis of the Government's high sterling rate will have disappeared. At that time, our capacity, because of the contraction of industry, will be such as to make it impossible to buy the things that the Government now encourage to come into Britain.
My concern is not so much with steel but with one of the spill-over effects. In my case, the cutback to single vessel operation at Norman by Park and Appleby-Frodingham at Scunthorpe might severely disadvantage the area. Indeed, the need at Scunthorpe, given the investment and improvement in infrastructure, suggests that investment in iron making may well have been a far wiser step than contraction of the existing capacity.
The cutback could be disadvantageous to the South Yorkshire area of the National Coal Board, which is among the two or three most successful deep mining areas in Europe. Substantial quantities of coal and coke from my constituency go direct from collieries such as Silverwood or from the ovens at Brook-house or Orgreave. If there is a marked cutback at Scunthorpe, or if economic pressure is maintained on the British Steel Corporation so that it feels it must import subsidised coal from abroad, the effect on the economy of South Yorkshire and the National Coal Board could be severe. It is a profitable area. It is no good the Minister saying to us in South Yorkshire that we could still sell the coal to the CEGB. That would be wasting good-quality coal. Obviously the price our coal commanded would be reduced. It is sensible to demand that the Government reconsider the question of imported coke.
I am delighted that the Under-Secretary of State for Energy has diligently sat through this debate. I hope that he can stay for another two or three minutes. The facts that I want to put to the Government are these.
In Germany the pithead price of coking coal is about 180 deutschemarks a tonne. The price of imported coking coal in West Germany is about 120 deutschemarks per tonne. The difference is covered by a production subsidy provided from the national funds in Bonn of about 50 deutschemarks a tonne. There is still a difference, which is split by a second subsidy. German industry is


helped by a third subsidy from the Community. The subsidy goes to the German industry for every tonne of coking coal that crosses Community national frontiers. The British Coal Board is placed in a difficulty. The British Steel Corporation faces an unnecessary disadvantage. Our steel industry, in many areas, is at least as successful and competitive as that in Germany and our coal industry is far and away the most successful in Western Europe, but the German steel industry can obtain its coking coal for £10 a tonne less than that which the British Steel Corporation must pay.
There will be more unemployment, more losses of jobs. There will be all the other spill-over factors that my hon. Friends mentioned. If we are to avoid those blind and foolish consequences, we must look a few years ahead rather than the few weeks which seem to be the limit of the Government's vision. In that case I believe that this country and our industry will be preserved from the appalling escalation of de-industrialisation which surely must be beginning to concern and upset the Government.

Mr. Michael Brown: I am sympathetic to the line of argument that the hon. Gentleman puts forward. I agree that the two great industries, coal and steel, are bound up with each other. However, I ask him to comment on the point that all the time there is a monopoly supplier for BSC. When it picks up the tab for the 20 per cent. increase in miners' wages, does he not feel that the National Coal Board and the miners have a responsibility?

Mr. Hardy: We have a responsibility to ensure that Britain is equipped to face the challenges when the oil and gas have gone in the first part of the 1990s. That means that we must have coal and miners. I should much rather pay miners a decent wage than some of the incomes that are frittered away supporting the invisible earnings which seem to be the sacred cow of Conservative Party philosophy. To pay lip service to the principle that we must have and maintain the most open market in the world, we are supposed to sacrific everything to serve that end.
The posture of the Secretary of State today is rather like that of the British general in the eighteenth century who sees the enemy soldiers lined up in their blue coats and looks at his own soldiers in their red coats, takes off his hat, bows and says "Gentlemen, shoot first". I do not believe that that was sensible then. It is certainly not the way to conduct the national economy today.

Mr. Allan Stewart: I should first like to take up one or two of the points on regional policy made by my hon. Friend the Member for Flint, West (Sir A. Meyer), recognising that regional policy is important in itself and is obviously of particular importance and relevance in this debate on steel.
In the past, regional policy in Britain was based on at least two assumptions that must now, at the least, be seriously questioned. In the past, one of the arguments was that we had no spare resources, that in some parts of the country there were shortages of labour and capital, that there was pressure on resources in the South-East but that there were spare resources in other areas, unemployment being the most obvious. Therefore, it was efficient to move resources by various methods from the congested areas to the uncongested areas.
The second assumption was that the target—the engine of growth—was large manufacturing industry, and especially inward manufacturing investment. Both those assumptions are no longer valid. In common with the whole Western world, we have a national unemployment problem rather than a regional one. If that is the situation, it becomes much more difficult to move resources from one part of the country to another.
I do not believe that we can look to heavy manufacturing industry to provide the large number of new jobs that we require. In the 1980s we shall not see the traditional manufacturing industries, or even new manufacturing industries, creating a large number of new jobs. Therefore I come to the point made by my hon. Friend the Member for Flint, West about service industries.
There has been a change in the attitude towards service industries. We recognise—as the previous Government recognised—the importance that they may have in


creating new employment in areas such as those that we are discussing. We must move furtherin this direction. I do not believe that we can any longer look just to any single solution, or to mobile manufacturing industry, for example, to provide the economic and social answers in the areas with which we are concerned.
I have not heard any great concentration on what was then a most significant decision on regional policy made by the previous Government, which was the abolition of the regional employment premium, without notice, without consultation and without phasing out. I commend the Department of Industry for the changes that it is now making in regional policy. It is giving industry a considerable time in which to adjust. It must make sense to concentrate our scarce resources on the areas of greatest need.
I am not as pessimistic as some about the future of our traditional industrialised areas. I live in the city of Glasgow. I am reassured when people come to my front door and offer to paint my house or to lay gravel along my garden path. I believe that inside every moonlighter there is a small firm trying to break out. This is not to suggest that if all moonlighters suddenly became small firms our problems would be solved. But there is an important role for that kind of development from below. We must look to indigenous industry to provide new jobs.
I do not wish to take up much more time on the steel industry many hon. Members wish to contribute. A number of hon. Members from Scotland have registered strong concern and worry about the position in Scotland. Hon. Members on both sides have analysed the situation. I should simply like to ask one or two questions. I hope that the Minister, in his reply, will be able to confirm the importance of Ravenscraig and to state that it has a genuine role. There is massive investment in Ravenscraig. A new spirit prevails, although it is recognised that there must be some sort of rundown. It will be immensely difficult for the Scottish steel division to achieve a target of breaking even by March next year.
I am sure that the whole House must welcome the fact that the Hunterston dispute was settled. That dispute not only

involved immense economic losses but also represented to many people a symbol of all that is wrong with our industrial relations. A massive new investment was held useless for a long time because of inter-union disputes. I hope that we shall receive some assurances on the long-term implications of the agreement relating to the port of Hunterston and the national dock scheme.
There is some concern about the apparent reluctance of the British Steel Corporation to allow the private sector to bid for, and take over, parts of its capacity that it wishes to close. I hope that the Government will put forward a positive policy, if the British Steel Corporation agrees, to encourage those in the private sector who are prepared to bid for such resources.

Mr. D. N. Campbell-Savours: Will the hon. Gentleman explain to Opposition Members what is the point of the private sector taking over sectors of a publicly owned industry if the argument is about capacity? The Secretary of State spent most of his time today trying to convince us that the argument is about capacity.

Mr. Stewart: We do not know for what purpose those in the private sector would use the resources. The British Steel Corporation may not see a future for a particular plant. How can we say that an entrepreneur from a related industry, or another industry, would not be able to use those resources and those people effectively in another way?
I believe that the BSC in Scotland has made great efforts to attract new jobs. These efforts may not have been immensely successful, but we need to concentrate on this approach, recognising that there are no instant solutions. I agree with my hon. Friend the Member for Lincoln (Mr. Carlisle) and those of my hon. Friends who have stated that we need to face reality. We cannot delay decisions. If decisions are delayed, they become more, not less, difficult. The managing director of BSC's Scottish division, looking back over his seven years in charge of the industry in Scotland, said:
It has never been anything other than high drama since I took over. My hope is that by taking this current action we can get back to the point on which to stabilise and move forward again.


That is the key. That is why I support the Government. We are now facing reality. It is essential to face reality, however hard, if we are to move forward in the future.

Mr. Robert Edwards: I would like very much to follow the speech of the hon. Member for Renfrewshire, East (Mr. Stewart) but I have other points in mind. I shall, however, take up one aspect of the hon. Gentleman's speech. Why does the British Steel Corporation not sell some plants to private enterprise? The reason for bringing British steel under public ownership was that private enterprise would not supply the risk capital to develop the industry. While there have been four speeches from the Government Benches condemning, root and branch, the whole structure of public ownership, we should consider the reasons why the Labour Government were compelled to nationalise the steel industry.
Between the wars the British steel barons were part of a European, indeed an international, cartel. They cut back steel production without consulting anyone. They fixed quotas for production for each steel-producing nation and in 1939–one month before war broke out—British steel representatives were in Berlin allocating Nazi Germany a production quota twice the size of Britain's quota. The cartel allocated 22½ million tons to Nazi Germany and cut our steel production to 10½ million tons. That is no laughing matter. It is one reason why the Nazi military machine swept through Europe. It was backed by the steel factories of Germany.
That is why the British Steel industry had to he brought in to public ownership. When the Secretary of State speaks so bitterly about the failure of nationalisation, it is important that we should put on record the history of the public ownership of steel.
The hon. Member for Flint, West (Sir A. Meyer) asked why the steel workers' unions should resist a pay offer of 2 per cent. In fact, they are resisting not a rise of 2 per cent. but a cut of 15 per cent. With inflation running at 17 per cent., a 2 per cent. increase is, in fact, a 15 per cent. cut in wages. Would any of us tolerate such an offer? The pur-

pose of trade unions is to look after the interests of their members. The miserable 2 per cent. offer by the BSC is a dastardly mistake. I take a poor view of the chairman claiming that BSC is broke. How can an industry with an asset formation of thousands of millions of pounds say that it is broke? That is like saying that the British Army or the Navy is broke. None of the armies and navies of the world can move without steel.
Steel is a strategic industry and must be sustained by the Government. Any Government who do not sustain that key industry are betraying the interests and future of our nation.
We have been producing steel in my constituency for 100 years. The plant at Bilston never lost money in 10 years of public ownership. Its surplus was £22 million. It had a 40 per cent. surplus on capital investment—the best record of any plant in the BSC. Yet the plant is to be closed, as if it had never existed, and that will double unemployment in my constituency.
After long months of weary negotiations, the BSC gave a pledge to keep open the rolling mills, with 400 workers employed there, and guaranteed at least five years' employment. The corporation went back on its word. The negotiations meant nothing. The plant is to close completely. In the past 10 years, 200 factories have closed and 16,000 jobs have been lost in the Wolver Hampton area. How can we make up for that loss of employment and deal with the despair that has been created, particularly in Bilston?
I hope that the Government will have second thoughts and not rush into this policy for steel. The European steel industry is expecting more growth. Why should we conclude that we have to cut back all the services, industries and everything that creates demand and helps growth in our economy? Why is there a reduction in the demand for steel? The answer is that we are cutting back on the building of houses, roads, universities, schools and hospitals—almost everything that we need. One only has to think of the slums that we have in this country that ought to be razed to the ground. What about the steel that is needed to rebuild those cities and towns for our children and for future generations? There


is plenty of work to be done, but we do not have the will because we still think in terms of the 1930s.

Dr. Jeremy Bray: There has been much anger in the House and it has been eloquently expressed by my hon. Friend the Member for Wolver Hampton, South-East (Mr. Edwards) and many other speakers. As a Member for another steel constituency, I think that the vicious attack on Consett has created a most savage wound. That is the murder of a town. It is a ghost that will haunt this Government for many years after they have been defeated at the polls.
I make a plea to the Secretary of State for Wales, if he is listening—because I think that he agrees—to give Consett a stay of execution for two years. If there was only one act that the Government could carry out that would soften the blow, that would be it. If the Government were able to do that, the total cost to the public and the effect on the economy would be slight. In those two years there would be time to look at the long-term future of Consett as a steel town. There would be time for the task force that Consett desperately needs to make good the deplorable lack of advanced factories and communications. That town has already lost 15,000 jobs through coal mine closures. The story of Consett is tragic. I hope that the Secretary of State for Wales will take a message back to the Cabinet, from some Conservatives and, I am sure, all of us on the Opposition Benches: will the Government look again at Consett?
I turn now to the wider issues of the steel industry, particularly in relation to Scotland. It is not simply a question of manning or labour productivity. We must look at the capital productivity of the industry. The capital employed per tonne of steel produced in Japan in comparison to that employed in this country is monstrous. The output of capital in Japan in the steel industry is far lower. One can make nonsense of comparisons by taking just one parameter and looking at that alone.
My right hon. and learned Friend the Member for Aberavon (Mr. Morris) compared the performances of the Scottish

and Welsh divisions of the British Steel Corporation. I checked in the annual report and found that the output per man in the Scottish division is marginally higher than the output per man in Wales. The losses per tonne in Scotland were £64 per tonne last year, which is vastly higher than the losses in Wales, which were £18 per tonne. We all know the reason for that. It is because Scotland had a high level of investment in incomplete and imbalanced plant. That position has been changed by the completion of Ravenscraig. That made it inevitable that if BSC was to pick out one plant for full loading it would pick out Ravenscraig. I was sorry that my right hon. and learned Friend the Member for Aberavon felt that, in some way, that was to blame for the tragedy that we face in Wales today.

Mr. Coleman: Is my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) aware that we in Wales were told that the reason why that was done in Scotland was political?

Dr. Bray: If my hon. Friend the Member for Neath (Mr. Coleman) will forgive me, that cuts both ways. All of us in Scotland were astonished to read of the appearance of the Ford engine plant at Cardiff. We had no knowledge that such a plant was under discussion. However, I will not elaborate on that. In Scotland we have had just as many closures.
When I was Parliamentary Secretary in the Ministry of Power, there was a particular development for a computer control system of a strip mill and I specifically put it at Margam in South Wales although I represented another steel constituency. I believed that Margam was the place where it should go. As a result, that computer-controlled system is now a world beater and it is exported all over the world.
In the present state of the steel industry, we must realise that past traditions of that industry which were set in the cut-throat days of competitive private enterprise are simply inappropriate for today. It comes close to home within the trade union world. The seniority rule within the ISTC means that when a plant is closed a man with 25 or 30 years' experience in the industry will be transferred into the next plant with only two


years' seniority. His earnings will suffer drastically as a result.
The output of a steelworks vitally affects the earnings of every steel worker in that plant. Yet today, when the output is achieved by pressing buttons and reading computer dials, it is a totally inappropriate basis for a wage. The pay of the power station worker, an oil refinery worker or a chemical plant worker does not go up or down in relation to the output of his plant, because his contribution to that effort does not change. If we had a different basis in the steel industry, wt would not get the pathetic suicidal arguments that are too often put forward.
In the big change that is going on in the steel industry, there is need to consider where real increases in efficiency can come from. At Ravenscraig they must come from a degree of continuing demanning. But there are only about 5,000 workers there. Suggestions of 12,000 or 15,000 steel workers in a plant are totally foreign to the situation in Ravenscraig. The real problems there are operating problems and particularly the speed of response. We have a turn-round time for a BOS vessel which is beating world records.
However, there are problems in quality control from the interruptions of continuous plants and problems that arise when instrument failures cause the loss of an hour's production elsewhere. To get the control right at a plant like this, one needs a different working tradition within the industry. My worry is that that is not understood and is not being fostered by the senior executives in the British Steel Corporation today. I have every respect for them, but they need to look more closely at the impact of present measures at working level—on manual workers and craftsmen, yes, but on technicians, and scientists too.
In this changed industry we must realise that we can no longer expect it to provide a basic employment for an area. If there is one lesson to be learnt from this tragic round of closures, it is that we must do away with the one-industry town. Corby, Shotton and Consett are vast human tragedies. I am making sure that in Motherwell we have our own bootstrap operation so that we do not remain a one-industry town, dependent upon Ravenscraig. I urge my hon.

Friends who represent other steel constituencies to do exactly the same. I know that a number of them are doing so.
That is the longer-term horizon. I urge the Government now to consider the points that have been put, particularly by my hon. Friend the Member for Rother Valley (Mr. Hardy) about the coal subsidy. I stress the need to maintain capacity against an upturn in demand. It is pathetic to close down capacity to the lowest point of the deepest recession since the war and think that that is adequate provision for the future of the industry.
If the Government want real cost discipline in the industry, they must accept that there will be a deficit for another two years at least. I ask them to put the basis of control on cost and performance at plant level and not simply on break-even. That is a crazy target to set for the steel industry today.
Against the broader strategy of economic policy, monetary policies, producing an exchange rate which makes it impossible for the steel industry to compete either against imports or in the export market—it seems that BSC has really given up in world trade—are making it impossible for other manufacturing industries, too, to compete with foreign competitors.
It is a serious prospect that within five years a quarter of our manufacturing industry will be closed down, and it will not be the least efficient quarter. The steel industry is not among the least efficient industries. It is making huge losses, but in terms of technical performance, investment and so on it is a great deal more efficient than many other industries.
The Government will receive some appalling shocks if they persist with their present broad economic strategy and their policy of strangling growth and boosting the exchange rate. Some Conservative Members must be very worried about that. They must be telling Ministers what they are being told by industrialists who cannot put up with an interest rate of 20 per cent. on their overdrafts and who cannot tolerate an exchange rate which is at least 25 per cent. overvalued against the dollar. For heaven's sake, will the Conservative Front Bench think again?

Mr. Peter Rost: No words spoken here today could possibly do justice to the social problems and human tragedies facing many thousands of people and their families who have dedicated perhaps a lifetime to the steel industry. I find it depressing that the situation was entirely predictable and entirely avoidable.
I represent a constituency in which many people work for a British Steel Corporation plant, but far fewer people than used to work there. Since 1970 I have watched a gradual decline of what used to be one of the gems of the British steel industry before nationalisation—part of the Stewarts and Lloyds group, Stanton and Staveley. That was a profitable unit. There was pride of participation. Many employees were shareholders in Stewarts and Lloyds. It was probably the most profitable steel company before nationalisation. Since nationalisation, that unit has gradually declined. First, the iron foundry was closed. Then even parts of the spun pipe business were closed down.
From the figures that are available, it appears that the unit near Ilkeston has continued to make profits—even under nationalisation. What has happened to those profits? They have been siphoned off back to head office and used to subsidise low productivity units in other parts of the country. The result is
that a unit in Derbyshire which could have expanded to meet an expanding market has been starved of capital because it has not been allowed to use its own generated cash flow for development. This is why I say that the tragedy we face today was entirely predictable and avoidable.
The steel-using industries in this country have declined—many of them because they have been nationalised. As examples, we have only to look at British Leyland or the shipbuilding industry. Other parts of the steel-using industries, such as heavy engineering, have suffered from severe competition because they have not been sufficiently competitive.
In my constituency, I have just about the largest manufacturer of bathroom and kitchen steel equipment in this country. Whenever I go there, I see an increasingly tragic story of its inability to use British steel sheet, except in declining quantities, because of the inadequate quality and

uncompetitive price. Gradually over the years more and more has been imported. This is just one example. We all know of other examples where the home market for British steel has gradually declined.
What I find so disastrous and so unacceptable is that if the industry had not been nationalised, as it was, in a doctrinaire way, for doctrinaire reasons, we should not be in this position today. The industry under private enterprise had problems, of course, but it is quite untrue that the industry had to be nationalised, as some hon. Members have tried to suggest, because it was not investing or was not getting the capital for expansion and modernisation.
Is it surprising that the industry did not get the money it needed for expansion under private ownership when for several years it was under threat of nationalisation, with vague talk about whether compensation would be adequate or inadequate? Is it surprising that private investors, some years before the industry was nationalised, went on strike because it was under that threat?
Looking at the nationalised industry today, would any hon. Member put his hand on his heart and be prepared to say that if a progressive and profitable company such as Stewarts and Lloyds had not been nationalised it would have failed to take advantage of the biggest boom in steel in the twentieth century—the production of high-quality under-sea-pipe, which we are now desperately having to import, mostly from Japan, to meet the North Sea oil and gas development?
Is it not a scandal that literally every incsh of that high-quality pipe has to be imported because the nationalised industry did not bother to develop the capacity to produce that quality material? How many hundreds of millions of pounds worth of that steel pipe are we having to import? Yet we are only just beginning to develop the continental shelf. The development will go on for the next 20 or 30 years.
How much offshore oil and gas does Japan have? Why did Japan have to develop that industry? It was not because of Japan's home market. We could have scooped the world market—or a large part of it—in that product. Certainly we could have coped with our own home market. Yet we have not the capacity


to handle the biggest growth area in steel today—the development of the under-sea oil and gas pipe.
It is a disaster that the industry was nationalised, and that the centralised, bureaucratic structure siphoned off profits from those areas which could have expanded, in order to subsidise over manning and uncompetitive production in other areas. If there is any blame or guilt to be shared, it should not be with those working in the industry. Many of them regret ever having supported a party that was dedicated to nationalisation. Let anyone ask those who are left at Stanton and Staveley whether they support nationalisation.
The guilty men, or their representatives, are sitting on the Opposition Benches. They are guilty of nationalising the industry, refusing to face the realities of life and not allowing the industry to develop in a competitive manner. Over many years they postponed the inevitable decisions that would have eased the pain of higher productivity and over manning and allowed the industry to remain viable enough to reinvest and remain competitive in world markets. They are the guilty men, and they have much to answer for.

Mr. Barry Jones: The hon. Member for Derbyshire, South-East (Mr. Rost) has not been so animated in debate since his long and sustained campaign in the early 1970s to defend the proposal to end free school milk. There has been a sub-debate on public ownership. We would not have the State steel industry now if there had not been State investment and State leadership.
I hope that the BSC'srecent assurances on the future of the Shotton finishing mill are based on sound assessment. Many of my constituents are disturbed by new speculation of further job losses. Britain has imported over £9 billion worth of foreign motor cars during the past decade, with £2 billion worth being imported in the past year. In 1978 alone, iron and steel imports were over £1 billion. Those are terrifying statistics, and they are worsened by the strong pound.
It is no exaggeration to say that we face a great emergency. There is a crisis

of confidence in the steel industry. Some may say that the BSC is demoralised, and certainly the work force is outraged, resentful and bewildered. The board of the BSC is embattled, the Government are bullying it and the unions denounce it. It appears that the accountants rule and that the balance sheet is supreme.
To attack the BSC might be to make the mistake of blaming the monkey rather than the organ-grinder. My complaint is that the Government are sanctioning measures that are induced by panic. They are simply reading the balance sheet and they are ignoring the social consequences. It is inevitable that higher welfare payments and a lower tax revenue will result from plant closures.
Perhaps, as one sees with the benefit of hindsight, the 1972 plan to modernise the industry went too far in concentrating on large coastal sites. We do not now have a sufficiently flexible response to changing patterns of demand. We are in danger of cutting back too harshly on our productive capacity. When the world demand for steel increases, as it must, our industry will not be able to benefit from the opportunity to export. I fear that Britain may have to import more steel in future.
The Government have blundered by permitting the BSC to offer a miserable and humiliating 2 per cent. pay increase. The Government have allowed a moderate union and its general secretary to be driven into a corner, and in a very public way. The Government, and especially the Secretary of State, are surprised. They are dismayed by the uproar and the threats that have followed. It is a case of
For, as you sow, you are like to reap".
The Secretary of State should compensate the corporation for the loss of its export markets following the strong pound. He should relax his severe financial policies. He should endeavour to obtain a subsidy on coking coal. He needs to listen to the informed viewpoint of steel workers. He should abandon his policy of non-intervention. I hope that he will insist on full consultation by the board with the TUC steel committee. Above all, he should reconsider his policies, especially with a view to avoiding what might be a confrontation. He


should not be afraid of stringent selective import controls if the case for them becomes increasingly stronger.
I previously labelled the right hon. Gentleman as a sort of Count Dracula. Having heard his speech today, I have not changed my view. In the nature of the way in which he is dictating his policies, he will destroy the industrial base of Great Britain. I know for sure that he is draining from the steel industry all its hope, all its confidence and all its vitality. In not many months' time the whole population will bitterly regret the result of the general election and the fact that the right hon. Gentleman was made Secretary of State for Industry.

Mr. Deputy Speaker: The Front Bench speeches will start at 9.15 pm. If Back Bench speeches are limited to five minutes each, that will help the Chair to call many of the hon. Members who have been sitting in the Chamber since the debate began.

Mr. David Alton: I am not sure how helpful the motion will be—it is an attempt to vilify the Secretary of State for Industry—in finding solutions to the seemingly intractable problems of the British Steel Corporation and the National Coal Board and in curing the cancer of unemployment that we face. However, the debate gives us the opportunity to articulate the fears, frustrations and worries of many of our constituents. The Secretary of State must realise that the rigid, doctrinaire monetarist approach that he and his Government are pursuing is leaving us with a legacy of chaos in many communities throughout the land. In many ways I believe that he and his colleagues are sleepwalking to disaster.
The right hon. Gentleman claims to be the guardian of the public purse. He claims to be concerned about safeguarding public expenditure. However, as many hon. Members have said today, the measures that he is introducing will inevitably lead to more money being spent on unemployment benefit and social security and on curing many of the problems that large-scale and widespread unemployment will cause.
There has been an over-reaction to the "money-grows-on-trees" mentality of the right hon. Gentleman's predecessors. I

believe, as he does, that throwing money at problems is like putting poultices on wounds. I do not go along with the view that we should go to the other extreme and say that we must never intervene and never participate in trying to save jobs, to save livelihoods and to try to help those who will suffer as a result of Government initiatives.
I bring to the right hon. Gentleman's attention the problems on Merseyside. In that area there are now 25 people trying to get every job that becomes available. About 12 per cent. of the population is unemployed. That 12 per cent. represents about 86,000 people, which is more than the entire number of jobless in Wales or Northern Ireland. I think that everyone must accept that the unemployment-vacancy ratio more accurately reflects the prospects of employment in an area. As I have said, on Merseyside there are 25 people pursuing every vacancy. It is almost a pit of despair in which every door is marked "No Exit". For anyone who is registered under the category of general labourer, the prospects of obtaining a job are even more remote. There are 145 vacancies in that category for 32,272 unemployed, a ratio of 222: 1. By anyone's standards those are long odds.
I shall have to forgo many of the remarks that I wanted to make in view of your stricture, Mr. Deputy Speaker. I understand the reasons for that.
The Minister of State intervened yesterday, quite rightly, in the Mecca no dispute in Liverpool where a further 1,000 people are being thrown on to the scrap heap of unemployment. The Minister rightly said that the Mecca no company was acting like an eighteenth century mill owner. In circumstances like those, there is sometimes room for Government intervention. The Government should play their part and not abdicate their responsibilities.
The Secretary of State should address himself to several questions. Will employment on the present scale always be necessary, desirable or even possible? How and by whom should work be organised? How should business organisations be established and to whom should they owe duty? How should their existing and future wealth be distributed? How should the financial institutions be organised, and how should finance be


made available to industry? Should we have growth under any circumstances, and how large should an organisation be allowed to become?
The Secretary of State should also ask himself whether different shades are possible between free enterprise and the nationalised industries. Above all, any fundamental re-examination of work and industry must recognise the value of experience and the danger of strikes and lost confidence arising from the overthrowing of existing rights and jobs, which is what the Secretary of State appears to be doing.
I believe that we must devise a social and economic system in which there is no inherent conflict between the aims of efficient enterprise and the public good. We need a new approach to enterprise, management, work and related economics. We should replace existing princoples of free enterprise, company law and the purpose of work while acknowledging past experience.
We need a new system of democratic enterprise and work which involves an insistence on a participative style of management. We need to recognise the interests of employees and the public and the need for a fundamental change of economic and tax policies. We should aim for an equality of economic opportunity by major degrees of employee financial participation in, or ownership of, existing firms and by means of new, employee-owned firms.
That system would create incentive and opportunity and reject bureaucracy and centralism. It would not necessarily rely on growth and would always aim for quality of life. It would not accept that people should be thrown on to the scrap-heap of unemployment from which there is no return.
The Secretary of State should address himself to these questions and not walk away from the legitimate responsibilities of this Government. Those responsibilities come with office and no Secretary of State, whoever he may be, has the right to abdicate those responsibilities.

Mr. Donald Coleman: We on the Opposition Benches do not hide our anger in this debate. Why should we

when anger and bitterness have become the order of the day in the communities that we represent?
More than 500,000 of our people were forced to leave Wales between 1921 and 1939 to look for work as a result of the great depression of the Welsh economy. Some members of the Tory Party have treated those facts as a myth—as the folklore of the valleys. Once again, under a Tory Government the spectre of depression of the 1930s, and what it did to Welsh men and women haunts the people of Wales.
We have been told that we are to expect redundancies of between 11,000 and 15,000 as the result of the announcement from the British Steel Corporation this week. The Western Mail—a newspaper not noted for its support of the working people of Wales—has put the figure of 15,000 before us. It has told the Tory Government that, unless a new regional policy is fashioned to cope with the latest crises, Wales is destined to become an economic wasteland and to remain one.
For us in Wales it would seem—as it would in other steel communities of the United Kingdom—that the right hon. Member for Bourn mouth, West (Sir J. Eden) and the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) told the truth about Tory plans for the steel industry when they spilt the beans during the Administration of the right hon. Member for Sidcup (Mr. Heath) and were sacked for their honesty.
The offspring of Selsdon man and the Iron Lady have visited us in Wales with the most disastrous consequences. Our troubles rest not only on what will happen as a result of the swingeing cuts in capacity and employment in the BSC. The National Coal Board has also warned that the loss of outlet for coking coal is likely to mean the shutdown of a further 11 South Wales collieries with at least 8,250 redundancies in the mining industry. The NCB has also warned us that such a situation would throw into chaos the long-term investment programme to put the coalfields back on a solidly profitable footing.
We must also remember the plight of the ancillary industries to the two giants. "Mr. Pastry" and "Black Bob" are humorous nicknames, but there is nothing humorous about what Villiers and


Scholey have done to the people of Wales. The level of unemployment will rise to 12 per cent. or 15 per cent. in Wales, but there are no redundancy proposals for that non-productive steel plant in Grosvenor Place. That is where the loss-makers in the industry are to be found.
There is strong feeling against Villiers and Scholey, but the role of the Secretary of State for Industry is worse. He seems to be hell bent on destroying us. He knows that the BSC cannot break even by March 1980. That is not on. His insistence on holding the BSC to an undertaking which was given in a moment of euphoria is beyond comprehension.
The Secretary of State has taken away our regional assistance. That makes hopeless the task of bringing new employment to Wales on the scale needed to cope with the enormity of the unemployment which faces us. Wales deserves better than the Secretary of State. The Secretary of State for Industry should know about the fragility of the Welsh economy and that monetarist policies and theories applied to the Welsh economy will spell its death knell. The right hon. Gentleman enjoyed a fair reputation in Wales. Does he want the Tory Party to preside over a devastated Wales in the 1980s and 1990s as it did in the 1920s and 1930s? For the sake of the people of Wales, I hope that he does not.

Mr. D. N. Campbell-Savours: I thank you, Mr. Deputy Speaker, for calling me so late in the debate.
Much of the debate has been about the tragedy in the traditional steel-producing areas. I speak in the debate in order to try to avoid a similar tragedy in my constituency. Workington is a major producer of pig iron, and voices are being raised about future pig iron capacity. Alarm bells are being rung. Of a work force of 5,223, 1,100 workers in my constituency work in the pig iron section of the BSC. We have the only United Kingdom blast furnace for pig iron. We contribute £35 million a year to the balance of payments.
The future of pig iron capacity in the United Kingdom relies on the capacity being maintained at Workington. There

has been a reduction in the domestic production of pig iron. In 1976 we produced nearly 500,000 tonnes. It is forecast that by 1980 that figure will be down to about 340,000 tonnes, or even lower. That decline in the pig iron industry stems from a number of reasons. The prime reason is new technology and its effect on pig iron content in castings. Recessions in the automobile, building and engineering industries, as well as in the steel industry, have also contributed.
There has been a reduction in the output of castings in the United Kingdom. In 1965, 6 million tonnes were produced but in 1979 only 3 million tonnes will be produced. That is a 50 per cent. reduction, and it is declining even further with the closure of foundries. We are subjected to intense pressure from import competition from the Brazilians, who have been found to be subsidising the export of pig iron to the tune of 70 per cent. In America they have to petition for relief against these aggressive levels of imports.
The Brazilians now take 5 per cent. of the domestic market in the United Kingdom, but their share is exceeded by the Germans, who now take 18 per cent. of the British market, with 60,000 tonnes. They have had no increase in the price of their pig iron in our market for five years and yet throughout this country the pig iron price has had to be raised by 300 per cent. in the same period. Yet it can be proved that the German pig iron industry is losing money, and one of its major companies nearly went bankrupt last year and had to be rescued by one of the municipal authorities in Germany. They have refused to reduce their capacity since 1973 and their whole intention is to dominate the European pig iron market.
The response of the British Steel Corporation has been to negotiate bilateral agreements with the pig iron producers in Germany, but the Germans are now breaking those agreements and in doing so they are doing immeasurable damage to my constituency. As a result, whereas in 1976 we had three blast furnaces in operation in Workington producing pig iron, by 1977 we had two, and now in 1979 we have effectively one and a half, since the second furnace is not producing to maximum capacity.
The problem that we now have in Workington is that we are on the borderline of viability in our pig iron producing capacity and we cannot afford to lose more business. If the Government do not take drastic action and are unwilling to intervene in this particularly difficult area, the future of many jobs in my constituency will be jeopardised. We want the Government, through the European Commission, to support the British Steel Corporation in its efforts to obtain fair trading arrangements with the Germans and to stop the irresponsible activity in our market.
Last week I put down a question to the Department of Industry which asked the Minister
what is his long-term policy on the maintenance of a pig-iron producing capacity in the United Kingdom?
I got an appalling answer:
The future of its pig iron producing capacity is a matter for the British Steel Corporation. Pig iron capacity in the private sector has all been closed or mothballed as uneconomic."—[Official Report, 10 December 1979; Vol. 975, c. 460.]
Incidentally, that reply was from an hon. Member who was a former employee of the steel industry in Workington in the 1960s.
The British Government must have a policy for pig iron production in the United Kingdom, because unless they are willing to formulate a policy large numbers of jobs in my constituency will be put at risk. I believe that it is the duty of this Government to enter into a positive partnership with the trade unions and with the management of the British Steel Corporation to rescue jobs wherever it is possible, in the national interest, and to preserve constituencies in the Northern region like mine that have problems of increasing unemployment. My hon. Friends have been agonising over their closures. Let us hope that we can see some change in the future.

Mr. Donald Anderson: I have three questions for the Secretary of State.
I ask the right hon. Gentleman to give the best possible estimate of the total job loss in South Wales as a result of these proposals by the British Steel Corporation. Secondly, if the Government will

not fund the operating loss of the BSC—and we know that there will be an operating loss in the financial year 1980–81, because the £300 million-plus lost this year will not be turned into a positive situation next year—what will be the effect? Will we see the BSC defaulting on wages and defaulting on payments to its suppliers, because it will then be technically bankrupt?
Finally, will the right hon. Gentleman prevail upon his right hon. Friend the Secretary of State to leave his monastery to visit South Wales to capture the bitterness and foreboding as we see our own regional economy crumbling? If he makes that visit, will he still adopt the philosophy of the folded arms and still remain on the sidelines as our regional economy in South Wales crumbles even further as a result of this Government's policy?

Mr. Michael Foot: I believe that the debate can help to awaken a feeling about the seriousness of the situation not only in the House, but throughout the country. I do not believe that the Government's response has been satisfactory in any sense whatever, as I shall seek to explain. I do not think that anyone who has listened to the whole debate, as I have, can doubt the strength of feeling in all affected areas.
My hon. Friend the Member for Consett (Mr. Watkins) made a speech that the whole House should study and remember. We hope that it will also have an effect on Government action. But that applies to the speeches made by all my hon. Friends who have referred to the problems in the threatened areas in their constituencies.
The Secretary of State for Industry did at least say that we were facing the most severe depression in modern times—and we are.

Sir Keith Joseph: For steel.

Mr. Foot: He now says "For steel". I think that the qualification should be removed. The right hon. Gentleman might be wiser if he removed the qualification.
We are facing the most serious depression in the steel industry for generations. Indeed, many of us believe that, looking at the world scene, we are facing the
most


serious crisis since the 1930s. Because of that and a combination of facts, we believe that the Government's response is squalidly inadequate for dealing with the situation.
The right hon. Gentleman should have dealt more extensively and openly than he did with many of the questions posed by my right hon. Friend the Member for Rhondda (Mr. Jones) and others who spoke later in the debate who have raised matters previously.
The right hon. Gentleman said that there were to be further discussions about coking coal. That is inadequate. He knows that there have already been long discussions. For example, he knows the figures. They have been given to him by my right hon. Friend the Member for Rhondda, my hon. Friend the Member for Rother Valley (Mr. Hardy) and the National Union of Mineworkers. The Government have the figures. They must know that it is not possible to defend absolute non-intervention regarding coking coal. There are subsidies in other countries. Therefore, the Government must consider whether to continue to adopt this non-interventionist policy and condemn to disaster not only the steel industry but a considerable section of the coal industry.
When the Prime Minister has replied to questions in the House on this matter, she has taken a more non-interventionist attitude than the Secretary of State for Industry, if that is possible. The Government have so far shown no inkling of a recognition of what they face in this respect and what Wales and the coal industry face. It would be a calamity not only for Wales but for the whole country if, at a time of wolrdwide energy crisis, the Government, because of their theories and their refusal to intervene and to contemplate a subsidy for a period, were to allow such grievous wounds to be inflicted on one of the industries on which we depend mainly for our future.
Therefore, we suggest that the Government's response—in particular the Secretary of State's response—on that subject has so far been totally unsatisfactory, and we hope to have something better in the replies that they attempt to give in future.

Mr. Whitney: Mr. Whitney rose—

Mr. Foot: I should really continue because I have given time for others to

speak in the debate and I want to deal with what the Secretary of State said. However, I give way.

Mr. Whitney: I am grateful to the right hon. Gentleman. I came into the Chamber before he began speaking. I do not deny that there is a case to be examined as regards coking coal, but does the right hon. Gentleman agree that the public money that has been given to the BSC and to the National Coal Board may be considered by other countries to be the equivalent of subsidies?

Mr. Foot: Other countries may think that, but, in the light of what happens to coking coal subsidies in other countries, we want to know whether the Government will defend the interests of the British coal industry and the British people.
My second reason for saying that the Secretary of State's speech was inadequate is that he made no attempt to describe what the Government intend to do in order to deal with the serious economic and social consequences of events in Wales and other parts of the country—acknowledged by the Secretary of State—if the Government's policy is pursued.
The Secretary of State claimed that he had foreseen these events. He shakes his head, but the Prime Minister said only today that these closures were long overdue. The right hon. Gentleman has been saying that the Government have been too slow in taking these measures. However, when it comes to the closures that will affect the livelihoods of people and whole communities, the Government do not bring forward any comprehensive plan. The Secretary of State's words have only given rise to worse confusion, if that is possible.
When my right hon. Friend the Leader of the Opposition cross-examined the right hon. Gentleman about what would happen to the steel industry, steel workers, their customers and all other industries dependent upon them if the Government adhere to their decision to bring down the chopper on 31 March next year, the Secretary of State did not give any answer. One may draw the conclusion that he is prophesying further closures, in addition to those forecast by the BSC.
On all those counts, and there are more, the speech of the Secretary of State was quite inadequate to deal with what he himself described as the most serious depression and crisis in this industry. He is responsible to this House and to the country, however much he may try to shed those responsibilities.
I stress that criticism in the light of the Prime Minister's replies to questions this afternoon. I do not know whether Conservative Members, and in particular the Secretary of State, appreciate how offensive it is to places such as Consett to be told by the Prime Minister that those closures are long overdue. I notice an attempt to withdraw that remark on behalf of the Prime Minister, and that is not surprising. Does the Secretary of State still think that these closures are long overdue? The Government cannot say that about Consett, nor about many of the other plants. The Prime Minister and the Secretary of State should never have spoken in that manner about a major crisis in a major industry.
Of course, the major deficiency in the Secretary of State's speech, apart from the items that I have already listed, is that the right hon. Gentleman does not face the important issue. He does not face the major issue of what is to happen to an industry of this nature and significance in our economy at a time of worldwide slump. For the right hon. Gentleman at such a moment merely to fall back on preaching the doctrines of pure competition, as he did, shows how utterly unfitted he is for this office.
Consider, for example—if anyone wishes—the defence industry. What nonsense it is for the Prime Minister to go around the world shaking her fist at the Russians with one hand while at the same time strangling the coal and steel industries of this country with the other. [Interruption.] Conservative Members who have just come in during the latter part of the debate have not appreciated the serious nature of what we have been discussing. We have been discussing the whole future of an industry upon which our defence industry will have to depend in the future. On those and other grounds, we say that it is quite untenable for the Government to have said that they accept the proposition of a 15 million tonne

figure as the right figure for steel production in this country.
It is on that basis that the Government have apparently supported what is being proposed. Indeed, the actions of the Government have been largely responsible for the BSC having to come forward with such propositions. But on a variety of grounds, partly the ones that I have mentioned but also with regard to the future economy of the country, we are not prepared to accept that steel production in this country—a great industrial nation with a great industrial future ahead of it if we can organise our affairs properly—can be based on a figure of 15 million tonnes.
I know that the BSC has said that there is a possibility that there will be a slight enlargement of that figure and that some facilities have been left for that purpose. But the top figure that has been suggested is 17 million tonnes. We believe that that is a doubtful figure. We believe that, in order to maintain the well-being and future of a great country such as ours, steel production should be worked and planned for on a considerably higher basis than that, particularly when we are importing huge quantities of steel at the present time.
There are a variety of different reasons for that, but that is all the more reason for not putting out of existence the capacity to make up for those steel imports. [HON. MEMBERS: "Why?"] It is no good hon. Members asking "Why?" There are a variety of reasons, but the principal reason is the one that the right hon. Gentleman acknowledged at the beginning of the debate. It is that we are facing the biggest worldwide recession in the steel industry that we have ever known. That is the principal cause of the difficulty which the steel industry has had to face, and the right hon. Gentleman acknowledged that.
The right hon. Gentleman asks that in the case of the steel industry we should follow his precepts and what he is recommending. The right hon. Gentleman might make such a recommendation because he felt that the Government had been so brilliantly successful in other respects. Even though he does not know very much about steel, had he been so brilliantly successful in the touch that he and his fellow members of the Government have shown in dealing with other


economic affairs, we might have been prepared to take him on trust. But they have failed in almost every other respect. Indeed, in almost every other respect they have contributed to the problems of the steel industry.
The Government's policies on currency, interest, and tackling inflation have all contributed greatly to the crisis of the BSC. In the last few months, that crisis has been greatly aggravated. Of course, hon. Members do not have to take my word for that. I know that I am not always taken immediately on trust by all Conservative Members. However, recently there was a good article in the Financial Times by a Mr. Anthony Harris, who gave an account of what he thought had happened to the application of the policies for which the right hon. Gentleman had been responsible—his monetary policies and his general outlook. Mr. Harris wrote:
The sad fact is that the first few months of the experiment have been almost a solid setback. Monetary targets have not made trade unionists rational or businessmen competent and now the very methods used are under question. But so, unfortunately, are the methods used by the would-be reformers. The automaticity"—
he used that horrible word—
so beloved of the theorists looks in real life like a Frankenstein monster with several screws loose.
I am sure that that is not a reference to the right hon. Gentleman.
It is a scheme of Byzantine complexity when all the major indices of money supply are moving in different directions.
Of course, that is what has happened in the last few months. Every monetary policy advocated by the right hon. Gentleman—all those policies on which he made such converts of the right hon. Lady the Prime Ministers and others—has been applied during the past two or three months with such effect that already they are having serious consequences in one industry after another.
We claim that the main objective in facing what the right hon. Gentleman has described as the worst depression for generations must be to sustain throughout that depression, recession or slump some of the great basic industries of this country. Among them, we say, are coal and steel. It would be a tragedy of the first order for this country—not merely Wales, Scotland, Durham and the places

where coal and steel are produced—if we allowed those basic industries to go out of existence.
There was a debate on steel in the previous Parliament, in which the right hon. Member for Sidcup (Mr. Heath) spoke. I know that the Prime Minister does not like the introduction of that right hon. Gentleman's name in this Chamber, but he made out a reasonable case. He said that if some of these great industries go to the wall, that does not mean to say that other industries will sprout up in their place, particularly in a period of recession. We are discussing Wales in particular tonight, and the Secretary of State for Wales will be replying to the debate. It is a question not only of what has happened throughout the country and our determination to ensure that we do not allow the basic industries to be destroyed but of whether the Secretary of State for Wales, whose salary needs to be reduced even more dastrically than that of the Secretary of State for Industry, has the intention of carrying out the undertakings that he gave when he and others were returned to the House in the May election.
The Conservative manifesto said:
We shall continue to see that adequate resources are found for the public sector, particularly the productive public sector. We shall continue the modernisation of the coal and steel industries that are still so important in Wales.
Instead of attempting to pursue that policy, the Government, in the past few months and particularly in the past few weeks, will deal to the coal and steel industries the heaviest blows that they have had to bear for generations. We will fight those proposals. We shall resist them with everything in our power. In the House of Commons we shall return to these subjects time and again. Soon after we return at the beginning of next year we must face them again in one form or another. The Opposition are determined to save British industry from all the ravages not only of the recession but of the Prime Minister and the Secretary of State for Industry and their right hon. and hon. Friends.
9.36 pm
The Secretary of State for Wales (Mr. Nicholas Edwards): The right hon. Member for Ebbw Vale (Mr. Foot) gave us a lecture on the brilliantly successful


management of the economy—or the failure to manage it with brilliant success. Some may feel that we are suffering today from the consequences of the management of the economy during the past five years and that that is one of the problems facing the steel industry today. He talked about the Conservative Party pledge to continue to give support to the productive public sector. That, of course, is what we are doing and why, in this current year, some £700 million is being given to the steel industry and another £450 million next year.
The right hon. Gentleman opened his speech by referring to the concern that was expressed in the House. No one concerned with industrial affairs in Britain, no one concerned about his fellow men and women, no one concerned about Wales—and certainly no one in my office—could fail to be shocked and dismayed by the scale of the industrial and social situation with which we are faced.
The right hon. Gentleman is not alone in understanding the harsh realities of what is happening. I, as Secretary of State, have in Wales the responsibility for responding to it. The right hon. Gentleman has every reason to understand what that responsibility must mean as he has personal experience of it. As a leading member of the last Government, he played his part in the dicision to close the steelworks that formed the heart and soul of his constituency in Ebbw Vale. That was a difficult decision. It meant 4,000 jobs lost. This afternoon the Leader of the Opposition reminded us that for him the closure of East Moors, under Labour, with the loss of over 3,000 jobs, was almost as traumatic an event for his constituency. I hope that at least the right hon. Member for Ebbw Vale will give my right hon. Friend and me the credit for understanding and regretting what is involved. I for one would certainly find another way if there were one. It is very tempting to cast around desperately for alternatives and put off the evil day, yet if we do that the price to be paid may be even higher.
We are faced in the world situation by the realities of market demand and competitiveness. Although we may dodge them for a bit, in a remorseless way they catch up with us in the end as there is a

limit to the amount that we can spend, borrow and extract from other productive industries in order to disguise the lack of a buyer for our product.
The Labour Government knew that. In their 1978 White Paper they said
The over-capacity that would result from unchanged policies would be more costly than either the Corporation or the country can afford.
The hon. Member for Wrexham (Mr. Ellis) made the point in a striking fashion in a debate in the Welsh Grand Committee in May 1975. He warned that we should not confuse the task of saving jobs with that of saving the steel industry. He said:
One must ask the question: what market in steel is required to absorb the output of the British steel industry with its present manning, at a level of productivity comparable to that of our foremost competitors?…the basic point is simple…unless we rapidly alter the technical efficiency of the steel industry in Wales…the whole of the Welsh steel industry is doomed. That is the question we must face."—[Official Report, Welsh Grand Committee, 7 May 1975; c. 85. 86.]
He was right.
However, the previous Government failed to face it adequately. They paid lip service to it. Apparently they did not mean it. They were not really prepared to see their words carried into effect. Now we face the consequences. The reality that the hon. Member for Wrexham recognised four years ago is with us with a vengeance. Despite the steady fall in demand throughout the period from 1975–76 and the clear evidence that we could not match our competitors, nothing like enough was done. The tragedy that we now face—it is a tragedy—is due to the fact that everyone has been dodging reality for too long.
I have been reminded that in the Welsh Grand Committee on 21 November I commented upon the improved output at Llanwern and Port Talbot in recent months. I had been encouraged by what I had heard from BSC management about the co-operation received at that time towards demanning. But it has happened too late. It may come as a surprise to hon. Members to learn that the numbers employed today at Llanwern are actually higher than five years ago. A little over 9,000 are now employed there. All those jobs are at risk because of the failure to recognise that one could not sell steel,


particularly in a declining market, if one needed more than twice as many people as one's competitors to make it.

Mr. Alec Jones: If the right hon. Gentleman is now in a position to give these figures on over manning, why did he not give them to the Welsh Grand Committee? Did he ask the management of British Steel what was the situation on the very figures that he has now mentioned to the House?

Mr. Edwards: I asked the management of British Steel. I was told that there must be considerable demanning. We all knew that. I went on to say it in the Grand Committee.

Mr. Alec Jones: The right hon. Gentleman is a liar.

Hon. Members: Withdraw.

Mr. Edwards: I hope that the right hon. Gentleman, who is a man I respect, will have the honour to withdraw that remark. If he looks at what I said—

Mr. Speaker: Order. I did not hear the remark. But if it was the word "liar" the right hon. Gentleman should withdraw it.

Mr. Alec Jones: If I used a word that is offensive to the House, I withdraw it. But the right hon. Gentleman did not make that statement in the Welsh Grand Committee. He knows it.

Mr. Edwards: I talked about the need for continuing improvement. The right hon. Gentleman knows it. The right hon. and learned Member for Aberavon (Mr. Morris) told us that the workers at Port Talbot had met every requirement on international manning levels. The fact remains that BSC needs twice as many men to make a ton of steel as almost all its competitors. The hon. Member for Motherwell and Wishaw (Dr. Bray) pointed out that only 5,000 were employed at Ravenscraig, not the 12,000 there are at Port Talbot.
Sir Charles Villiers admitted in September that BSC's productivity was the lowest in the world and that, despite the expenditure of more than £3,000 million over the last four years and the commitment by this Government of another £450 million next year, we were still at the bottom of the league table. By almost every index of measurement, BSC's

performance is worse than that of its competitors. That is why BSC is now in no condition to withstand the sharp fall in demand that has occurred. BSC believes that there is not sufficient market for its steel and that long-term trends are poor. It is that situation and that conflict between the competitive position of BSC and its market that is the cause of the present crisis, not the financial target set by my right hon. Friend.

Mr. Anderson: Mr. Anderson rose—

Mr. Edwards: Having accumulated over £1,300 million of losses over the last four years, BSC found itself in the position where it was likely to be operating at more than 25 per cent. below capacity. In that situation, no steel company in the world could remain competitive and losses were bound to accelerate upwards again.

Mr. Anderson: Will the right hon. Gentleman comment on the fact that the BSC has decided, as an act of policy because of the overvalued pound, to go out of 2 million tons in the export market? That 2 million tons is the equivalent of the output from Port Talbot or Llanwern.

Mr. Edwards: The fact remains that, despite the difficulties and problems, BSC is still exporting more than it imports. It is clearly important that it should continue to maximise those markets.
Running steel plant at reduced capacity, particularly at the heavy end, is expensive, as the hon. Member for Newport (Mr. Hughes) recognised in his speech. Energy and raw material costs per ton of iron rise dramatically and quality suffers if blast furnaces are not run close to their design capacity. That is the situation which forces action. If the BSC failed to react, its very existence would be threatened.
Government policies, financial targets and cash limits do no more than highlight the essential need rapidly to adapt to the market if the long-term future of the business is to be saved.
Dodging the issue in the past has brought us to the point where the existence and sheer survival of the British steel industry depends on bringing capacity into line with demand and on reducing the manning levels to those of our competitors.
Whether steel making survives at all at Llanwern, Port Talbot, Scunthorpe, with its reduced level, Sheffield, Red car, Lackenby and Ravenscraig is critically dependent on adequate utilisation. If there can be no dodging of the need to cut capacity, it is fair to ask, as did the right hon. Member for Rhondda (Mr. Jones) and the right hon. and learned Member for Aberavon, about the assumptions made by the BSC, its assessment of the market, the viability of its plan and its management record. They are legitimate questions. I have asked them all myself.
I have to tell the House that the Government have no reason to question BSC's judgment on the size of the market. All previous forecasts have proved too optimistic. It seems a long time since we foresaw a requirement for 36 million to 38 million tons of steel-making capacity by the early 1980s. If the estimates are too low, the corporation can, by reactivating existing plants, quickly raise capacity to 18 million tons and, over a longer period, to a great deal more.
The right hon. Member for Rhondda and other hon. Members asked about imports. I do not believe that import controls are a solution. Imports from non-Community sources are already the subject of voluntary restraint agreements between the Commission and the main supplying countries as part of the Commission's anti-crisis measures.

Mr. Alec Jones: Will the right hon. Gentleman give way?

Mr. Edwards: I have already given way to the right hon. Gentleman, and I should like to finish the point that I am making.
Imports of finished steel have generally remained fairly stable, in the region of 21 per cent. of total deliveries in the United Kingdom, since 1975. Imports of sheet and plate have fallen and the United Kingdom is exporting ½ million tons more than it imports.
The only sure way of recapturing a larger share of the domestic market is by being competitive in price, quality and service. Import controls must mean higher prices, poorer material for customers and a higher burden on important customers

such as British Leyland. I do not believe that hon. Members should be requesting that.

Mr. Alec Jones: If that is now the Secretary of State's view on import controls, why did he send a letter to the Welsh Trades Union Congress indicating that there was a place for import controls when massive redundancies and dislocation were taking place? That is what the Secretary of State said in a letter that went from his office to the Welsh TUC.

Mr. Edwards: What I said has been said by my right hon. and hon. Friends on previous occasions. When unfair subsidised imports are destroying markets, temporary action is required to deal with that.
The right hon. Member for Swansea, West (Mr. Williams) suggested that other countries subsidised their steel industries while we did not. Over the past four years, more than £3,000 million has been put into our steel industry and £1,250 million has gone into losses. If that is not subsidising our steel industry, I do not know what is.
A number of hon. Members asked about the effect on coal. It has been argued that the British Steel Corporation's plan will lead to pit closures. It is not the plan that will do that but the inability to sell steel. Additional steel capacity does not require one ton of extra coal. It is the ability to manufacture and sell steel which requires coal.
The issue of coking coal imports was raised. It is imperative that BSC has commercial freedom to purchase its raw material requirements when it wishes and where it will obtain the best deal, taking account of price and quality. I am sure that that is in the best interests of all those who work in the steel industry.
The Government do not exclude the possibility of a coke and coal subsidy but it must be the outcome of a proper agreement between the two nationalised industries. Those discussions are taking place and my right hon. Friend the Secretary of State for Energy will meet the chairman of the National Coal Board and the unions on this subject on Tuesday. We must await the outcome of those discussions.
The right hon. and learned Member for Aberavon asked about redundancy


payments and the possibility of BSC breaking even in 1980–81. The Leader of the Opposition asked the same question. On redundancy payments, the provision of £450 million next year is expected to cover redundancy costs as well as further investment. I confirm that on present assumptions, and if planned proposals are implemented in the time proposed, BSC expects a profit over 1980–81 taken as a whole.
I turn now to the speech made by my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown), who asked for help for his constituency during the transition period. I understand my hon. Friend's concern. He said in the House on 7 November that
if we encourage the high-cost new plants to operate below their capacity we shall build up a tremendous problem for the steel industry in future. No steel worker will forgive us if we fail to take the urgent steps that are necessary."—[Official Report, 7 November 1979; Vol. 973 cc. 479–80.]
My hon. Friend went on the say this afternoon—I am sure he is right—that we cannot continue to make steel and drop it around the country. That is the problem that we face.
The right hon. Member for Rutherglen (Mr. MacKenzie) raised a number of points. I shall see that the comments he made about the Scottish steel industry are referred to the chairman of BSC, and my hon. Friend the Under-Secretary of State for Scotland will write to him about the Scottish Development Agency. The right hon. Member asked about BSC (Industry) Ltd. and its funding. I know that the steel workers' trade unions and everyone involved in the steel closure areas have a high regard for the activities of BSC (Industry) Ltd. I assure the right hon. Member that the finance for BSC (Industry) Ltd. can be provided out of the restructuring funds that will be made available, and it is up to BSC to decide on the amount it allocates to BSC (Industry) Ltd.
The hon. Member for Consett (Mr. Watkins) spoke in moving terms about the affairs of his constituency, and I shall say a word more about that in a moment. He spoke about the advance of Consett to viability and the threat that it was now under, which seemed so unfair in present circumstances. I would not quarrel with what he said about the plant and the men at Consett. However,

if one has a nationalised industry one is bound to plan nationally, and that may mean sacrificing one plant to improve the loading of another. Had Consett been in independent, private hands it might well have survived. On the other hand, it must fairly be said that it might not have received the investment that has taken it to its present state.

Mr. David Watkins: Is the Secretary of State seriously saying that Consett must be sacrificed to make other places viable? If so, what are these places?

Mr. Edwards: It can make little sense to BSC to have large, modern plants, in which there is huge investment, not being fully utilised.
I turn to the question of the scale of the problem. No one can doubt that it is enormous. Although it is true that we are in this position because of the failure of action in the past and because every interference by the Government in the internal management of the BSC has been disastrous, it is the present communities that suffer the consequences. It is right for every Government to cushion the violence of change, ease the impact of closure and encourage further employment.
I make no attempt to disguise the scale of the problem that we must tackle. [Interruption.] I hope that hon. Members want to hear about the remedial measures. I made it clear when I outlined what we will do at Shotton that we attach the highest priority to taking effective action in these areas. I have no doubt that even more formidable action will need to be taken on a considerable scale in the areas that are now affected.
The Prime Minister made it clear earlier today, as did the Secretary of State, that we recognise the obligation of the Government to take effective action. But until we have the final plans, particularly in South Wales, for the way in which the closure will be carried out, I cannot be specific about the areas that will be considered for upgrading under regional policy provisions or what particular assistance should be generated for those areas. I shall consult the Welsh Development Agency and BSC (Industry) Ltd. about the level of the programme that will be made available. They have a smaller budget, but we made it clear in Shotton that additional funds will be


made available to meet the new problems that we face.
In this debate hon. Members have expressed shock and dismay at what is happening. I share those feelings. I have committed the Government to vigorous action to tackle the social and industrial consequences. But I cannot accept that it would be right for the Government to intervene to stop BSC from carrying out its life-preserving task of restoring its competitive position. Nor can I accept the blame and criticism that have been heaped upon my right hon. Friend and this Government. The blame lies with

those who shirked taking the necessary measures for so long. They knew the realities, they spelt them out and then they ran away from their responsibilities. The blame lies with those who missed the opportunity for a phased rundown as a new capacity came on stream and the market shrank. Thousands of people will now suffer the consequences of that failure of the Labour Government.

Question put,

That Class IV, Vote 24 be reduced by £10,000 in respect of the salary of the Secretary of State for Industry:—

The House divided: Ayes 253, Noes 310.

Division No. 126]
AYES
[10 pm


Abse, Leo
Douglas-Mann, Bruce
Johnson, James (Hull West)


Adams, Allen
Dubs, Alfred
Johnson, Walter (Derby South)


Allaun, Frank
Duffy, A. E. P.
Jones, Rt Hon Alec (Rhondda)


Alton, David
Dunn, James A. (Liverpool, Kirkdale)
Jones, Barry (East Flint)


Anderson, Donald
Dunnett, Jack
Jones, Dan (Burnley)


Archer, Rt Hon Peter
Dunwoody, Mrs Gwyneth
Kaufman, Rt Hon Gerald


Armstrong, Rt Hon Ernest
Eadie, Alex
Kerr, Russell


Ashton, Joe
Eastham, Ken
Kilroy-Silk, Robert


Atkinson, Norman (H'gey, Tott'ham)
Edwards, Robert (Wolv SE)
Kinnock, Neil


Bagier, Gordon A. T.
Ellis, Raymond (NE Derbyshire)
Lambie, David


Barnett, Guy (Greenwich)
Ellis, Tom (Wrexham)
Lamborn, Harry


Barnett, Rt Hon Joel (Heywood)
English, Michael
Lamond, James


Beith, A. J.
Ennals, Rt Hon David
Leighton, Ronald


Benn, Rt Hon Anthony Wedgwood
Evans, loan (Aberdare)
Lestor, Miss Joan (Eton &amp; Slough)


Bennett, Andrew (Stockport N)
Ewing, Harry
Lewis, Arthur (Newham North West)


Bidwell, Sydney
Field, Frank
Lewis, Ron (Carlisle)


Booth, Rt Hon Albert
Fitch, Alan
Litherland, Robert


Boothroyd, Miss Betty
Flannery, Martin
Lofthouse, Geoffrey


Bottomley, Rt Hon Arthur (M'brough)
Fletcher, L. R. (Ilkeston)
Lyon, Alexander (York)


Bray, Dr Jeremy
Fletcher, Ted (Darlington)
Lyons, Edward (Bradford West)


Brown, Robert C. (Newcastle W)
Foot, Rt Hon Michael
Mabon, Rt Hon Dr J. Dickson


Brown, Ronald W. (Hackney S)
Ford, Ben
McCartney, Hugh


Brown, Ron (Edinburgh, Leith)
Forrester, John
McDonald, Dr Oonagh


Buchan, Norman
Foulkes, George
McElhone, Frank


Callaghan, Rt Hon J. (Cardiff SE)
Fraser, John (Lambeth, Norwood)
McGuire, Michael (Ince)


Callaghan, Jim (Middleton &amp; P)
Freeson, Rt Hon Reginald
McKay, Allen (Penistone)


Campbell, Ian
Garrett, John (Norwich S)
McKelvey, William


Campbell-Savours, Dale
Garrett, W. E. (Wallsend)
MacKenzie, Rt Hon Gregor


Canavan, Dennis
George, Bruce
Maclennan, Robert


Cant, R. B.
Gilbert, Rt Hon Dr John
McMahon, Andrew


Carmichael, Neil
Ginsburg, David
McMillan, Tom (Glasgow, Central)


Carter-Jones, Lewis
Golding, John
McNally, Thomas


Cartwright, John
Gourlay, Harry
McWilliam, John


Clark, Dr David (South Shields)
Graham, Ted
Magee, Bryan


Cocks, Rt Hon Michael (Bristol S)
Grant, George (Morpeth)
Marks, Kenneth


Cohen, Stanley
Grant, John (Islington C)
Marshall, David (GI'sgow,Shettles'n)


Coleman, Donald
Hamilton, James (Bothwell)
Marshall, Dr Edmund (Goole)


Concannon, Rt Hon J. D.
Hamilton, W. W. (Central Fife)
Marshall, Jim (Leicester South)


Conlan, Bernard
Hardy, Peter
Martin, Michael (GI'gow, Springb'rn)


Cook, Robin F.
Harrison, Rt Hon Walter
Maxton, John


Cowans, Harry
Hattersley, Rt Hon Roy
Meacher, Michael


Cox, Tom (Wandsworth, Tooting)
Haynes, Frank
Mellish, Rt Hon Robert


Craigen, J. M. (Glasgow, Maryhill)
Healey, Rt Hon Denis
Mikardo, Ian


Crowther, J. S.
Heffer, Eric S.
Millan, Rt Hon Bruce


Cryer, Bob
Hogg, Norman (E Dunbartonshire)
Mitchell, Austin (Grimsby)


Cunliffe, Lawrence
Holland, Stuart (L'beth, Vauxhall)
Mitchell, R. C. (Soton, Itchen)


Cunningham, George (Islington S)
Home Robertson, John
Morris, Rt Hon Alfred (Wythenshawe)


Cunningham, Dr John (Whitehaven)
Homewood, William
Morris, Rt Hon Charles (Openshaw)


Dalyell, Tam
Hooley, Frank
Morris, Rt Hon John (Aberavon)


Davidson, Arthur
Horam, John
Morton, George


Davies, Rt Hon Denzil (Llanelli)
Howell, Rt Hon Denis (B'ham, Sm H)
Moyle, Rt Hon Roland


Davies, Ifor (Gower)
Howells, Geraint
Mulley, Rt Hon Frederick


Davis, Clinton (Hackney Central)
Huckfield, Les
Newens, Stanley


Deakins, Eric
Hudson Davies, Gwilym Ednyfed
Oakes, Rt Hon Gordon


Dempsey, James
Hughes, Mark (Durham)
Ogden, Eric


Dewar, Donald
Hughes, Robert (Aberdeen North)
O'Halloran, Michael


Dixon, Donald
Hughes, Roy (Newport)
O'Neill, Martin


Dobson, Frank
Janner, Hon Greville
Orme, Rt Hon Stanley


Dormand, Jack
Jay, Rt Hon Douglas
Owen, Rt Hon Dr David


Douglas, Dick
John, Brynmor
Palmer, Arthur




Park, George
Sheldon, Rt Hon Robert (A'ton-u-L)
Varley, Rt Hon Eric G.


Parker, John
Shore, Rt Hon Peter (Step and Pop)
Wainwright, Edwin (Dearne Valley)


Parry, Robert
Short, Mrs Renée
Walker, Rt Hon Harold (Doncaster)


Pavitt, Laurie
Silkin, Rt Hon John (Deptford)
Watkins, David


Pendry, Tom
Silkin, Rt Hon S. C. (Dulwich)
Weetch, Ken


Penhaligon, David
Silverman, Julius
Wellbeloved, James


Powell, Raymond (Ogmore)
Skinner, Dennis
Welsh, Michael


Prescott, John
Smith, Rt Hon J. (North Lanarkshire)
White, Frank R. (Bury &amp; Radcliffe)


Race, Reg
Snape, Peter
White, James (Glasgow, Pollok)


Radice, Giles
Soley, Clive
Whitehead, Phillip


Rees, Rt Hon Merlyn (Leeds South)
Spearing, Nigel
Whitlock, William


Richardson, Miss Jo
Spriggs, Leslie
Wigley, Dafydd


Roberts, Albert (Normanton)
Stallard, A. W.
Willey, Rt Hon Frederick


Roberts, Allan (Bootle)
Steel, Rt Hon David
Williams, Rt Hon Alan (Swansea W)


Roberts, Ernest (Hackney North)
Stoddart, David
Williams, Sir Thomas (Warrington)


Roberts, Gwilym (Cannock)
Strang, Gavin
Wilson, William (Coventry SE)


Robertson, George
Straw, Jack
Winnick, David


Robinson, Geoffrey (Coventry NW)
Taylor, Mrs Ann (Bolton West)
Woodall, Alec


Rodgers, Rt Hon William
Thomas, Dafydd (Merioneth)
Woolmer, Kenneth


Rooker, J. W.
Thomas, Jeffrey (Abertillery)
Wrigglesworth, Ian


Ross, Ernest (Dundee West)
Thomas, Mike (Newcastle East)
Young, David (Bolton East)


Rowlands, Ted
Thomas, Dr Roger (Carmarthen)



Ryman, John
Thorne, Stan (Preston South)
TELLERS FOR THE AYES:


Sandelson, Neville
Tilley, John
Mr. Joseph Dean and


Sever, John
Tinn, James
Mr. Terry Davis.


Sheerman, Barry
Torney, Tom





NOES


Adley, Robert
Clegg, Walter
Hamilton, Hon Archie (Eps'm&amp;Ew'll)


Alexander, Richard
Cockeram, Eric
Hamilton, Michael (Salisbury)


Amery, Rt Hon Julian
Colvin, Michael
Hampson, Dr Keith


Ancram, Michael
Cope, John
Hannam, John


Arnold, Tom
Cormack, Patrick
Haselhurst, Alan


Aspinwall, Jack
Costain, A. P.
Hastings, Stephen


Atkins, Rt Hon H. (Spelthorne)
Cranborne, Viscount
Havers, Rt Hon Sir Michael


Atkins, Robert (Preston North)
Critchley, Julian
Hawkins, Paul


Atkinson, David (B'mouth, East)
Crouch, David
Hawksley, Warren


Baker, Kenneth (St. Marylebone)
Dean, Paul (North Somerset)
Hayhoe, Barney


Baker, Nicholas (North Dorset)
Dickens, Geoffrey
Heath, Rt Hon Edward


Banks, Robert
Dorrell, Stephen
Heddle, John


Beaumont-Dark, Anthony
Douglas-Hamilton, Lord James
Henderson, Barry


Bell, Ronald
Dover, Denshore
Heseltine, Rt Hon Michael


Bendell, Vivian
du Cann, Rt Hon Edward
Hicks, Robert


Bennett, Sir Frederic (Torbay)
Dunn, Robert (Dartford)
Higgins, Rt Hon Terence L.


Benyon, Thomas (Abingdon)
Durant, Tony
Hogg, Hon Douglas (Grantham)


Best, Keith
Dykes, Hugh
Holland, Philip (Carlton)


Bevan, David Gilroy
Eden, Rt Hon Sir John
Hooson, Tom


Biffen, Rt Hon John
Edwards, Rt Hon N. (Pembroke)
Hordern, Peter


Blackburn, John
Eggar, Timothy
Howe, Rt Hon Sir Geoffrey


Blaker, Peter
Elliott, Sir William
Howell, Rt Hon David (Guildford)


Body, Richard
Emery, Peter
Howell, Ralph (North Norfolk)


Bonsor, Sir Nicholas
Eyre, Reginald
Hunt, David (Wirral)


Boscawen, Hon Robert
Fairbairn, Nicholas
Hunt, John (Ravensbourne)


Bottomley, Peter (Woolwich West)
Faith, Mrs Sheila
Irving, Charles (Cheltenham)


Bowden, Andrew
Farr, John
Jenkin, Rt Hon Patrick


Boyson, Dr Rhodes
Fell, Anthony
Johnson Smith, Geoffrey


Braine, Sir Bernard
Finsberg, Geoffrey
Jopling, Rt Hon Michael


Bright, Graham
Fisher, Sir Nigel
Joseph, Rt Hon Sir Keith


Brinton, Tim
Fletcher, Alexander (Edinburgh N)
Kaberry, Sir Donald


Brittan, Leon
Fletcher-Cooke, Charles
Kershaw, Anthony


Brocklebank-Fowler, Christopher
Fookes, Miss Janet
Kilfedder, James A.


Brooke, Hon Peter
Forman, Nigel
Kimball, Marcus


Brotherton, Michael
Fowler, Rt Hon Norman
King, Rt Hon Tom


Brown, Michael (Brigg &amp; Sc'thorpe)
Fox, Marcus
Kitson, Sir Timothy


Browne, John (Winchester)
Fraser, Peter (South Angus)
Knight, Mrs Jill


Bruce-Gardyne, John
Fry, Peter
Knox, David


Bryan, Sir Paul
Galbraith, Hon T. G. D.
Lamont, Norman


Buchanan-Smith, Hon Alick
Gardiner, George (Reigate)
Lang, Ian


Buck, Antony
Gardner, Edward (South Fylde)
Langford-Holt, Sir John


Budgen, Nick
Garel-Jones, Tristan
Latham, Michael


Bulmer, Esmond
Gilmour, Rt Hon Sir Ian
Lawrence, Ivan


Burden, F. A.
Glyn, Dr Alan
Lawson, Nigel


Butcher, John
Goodhew, Victor
Lee, John


Butler, Hon Adam
Goodlad, Alastair
Lennox-Boyd, Hon Mark


Cadbury, Jocelyn
Gorst, John
Lester, Jim (Beeston)


Carlisle, John (Luton West)
Gow, Ian
Lewis, Kenneth (Rutland)


Carlisle, Kenneth (Lincoln)
Gower, Sir Raymond
Lloyd, Ian (Havant &amp; Waterloo)


Carlisle, Rt Hon Mark (Runcorn)
Grant, Anthony (Harrow C)
Lloyd, Peter (Fareham)


Chalker, Mrs.Lynda
Greenway, Harry
Luce, Richard


Channon, Paul
Griffiths, Eldon (Bury St Edmunds)
Lyell, Nicholas


Chapman, Sydney
Griffiths, Peter (Portsmouth N)
McAdden, Sir Stephen


Clark, Hon Alan (Plymouth, Sutton)
Grist, Ian
McCrindle, Robert


Clark, Dr William (Croydon South)
Grylls, Michael
Macfarlane, Neil


Clarke, Kenneth (Rushcliffe)
Gummer, John Selwyn
MacGregor, John







MacKay, John (Argyll)
Patten, John (Oxford)
Stewart, Ian (Hitchin)


Macmillan, Rt Hon M. (Farnham)
Pattie, Geoffrey
Stewart, John (East Renfrewshire)


McNair-Wilson, Michael (Newbury)
Pawsey, James
Stokes, John


McNair-Wilson, Patrick (New Forest)
Percival, Sir Ian
Stradling Thomas, J.


McQuarrie, Albert
Peyton, Rt Hon John
Tapsell, Peter


Major, John
Pink, R. Bonner
Taylor, Robert (Croydon NW)


Marland, Paul
Porter, George
Tebbit, Norman


Marlow, Tony
Prentice, Rt Hon Reg
Temple-Morris, Peter


Marshall, Michael (Arundel)
Price, David (Eastleigh)
Thatcher, Rt Hon Mrs Margaret


Marten, Nell (Banbury)
Prior, Rt Hon James
Thomas, Rt Hon Peter (Hendon S)


Mates, Michael
Proctor, K. Harvey
Thompson, Donald


Mather, Carol
Pym, Rt Hon Francis
Thorne, Neil (Ilford South)


Maude, Rt Hon Angus
Raison, Timothy
Thornton, Malcolm


Mawby, Ray
Rathbone, Tim
Townend, John (Bridlington)


Mawhinney, Dr Brian
Rees, Peter (Dover and Deal)
Townsend, Cyril D. (Bexleyheath)


Maxwell-Hyslop, Robin
Rees-Davies, W. R.
Trippier, David


Mayhew, Patrick
Renton, Tim
Trotter, Neville


Mellor, David
Rhodes James, Robert
Van Straubenzee, W. R.


Meyer, Sir Anthony
Ridley, Hon Nicholas
Vaughan, Dr Gerard


Miller, Hal (Bromsgrove &amp; Redditch)
Ridsdale, Julian
Viggers, Peter


Mills, lain (Meriden)
Rifkind, Malcolm
Waddington, David


Mills, Peter (West Devon)
Roberts, Michael (Cardiff NW)
Wakeham, John


Miscampbell, Norman
Roberts, Wyn (Conway)
Waldegrave, Hon William


Mitchell, David (Basingstoke)
Rossi, Hugh
Walker, Rt Hon Peter (Worcester)


Molyneaux, James
Rost, Peter
Walker, Bill (Perth &amp; E Perthshire)


Monro, Hector
Royle, Sir Anthony
Walker-Smith, Rt Hon Sir Derek


Montgomery, Fergus
Sainsbury, Hon Timothy
Waller, Gary


Moore, John
St. John-Stevas, Rt Hon Norman
Walters, Dennis


Morgan, Geraint
Scott, Nicholas
Ward, John


Morris, Michael (Northampton, Sth)
Shaw, Giles (Pudsey)
Warren, Kenneth


Morrison, Hon Charles (Devizes)
Shaw, Michael (Scarborough)
Watson, John


Morrison, Hon Peter (City of Chester)
Shelton, William (Streatham)
Wells, John (Maidstone)


Mudd, David
Shepherd, Colin (Hereford)
Wells, Bowen (Hert'rd &amp; Stev'nage)


Murphy, Christopher
Shepherd, Richard (Aldridge-Br'hills)
Wheeler, John


Myles, David
Shersby, Michael
Whitelaw, Rt Hon William


Neale, Gerrard
Silvester, Fred
Whitney, Raymond


Needham, Richard
Sims, Roger
Wickenden, Keith


Nelson, Anthony
Skeet, T. H. H.
Wiggin, Jerry


Neubert, Michael
Smith, Dudley (War, and Leam'ton)
Wilkinson, John


Newton, Tony
Speed, Keith
Williams, Delwyn (Montgomery)


Nott, Rt Hon John
Speller, Tony
Winterton, Nicholas


Onslow, Cranley
Spence, John
Wolfson, Mark


Oppenheim, Rt Hon Mrs Sally
Sproat, Iain
Young, Sir George (Acton)


Osborn, John
Squire, Robin
Younger, Rt Hon George


Page, John (Harrow, West)
Stainton, Keith



Page, Rt Hon R. Graham (Crosby)
Stanbrook, Ivor
TELLERS FOR THE NOES: 


Parkinson, Cecil
Stanley, John
Mr. Spencer le Marchant and


Parris, Matthew
Steen, Anthony
Mr. Anthony Berry.


Patten, Christopher (Bath)
Stevens, Martin

Question accordingly negatived.

Original Question again proposed.

It being after Ten o'clock, the debate stood adjourned.

Mr. Speaker: I now have to put the Question as required by Standing Order No. 18 on the outstanding total amounts to be granted from the Consolidated Fund.

Orders of the Day — DEFENCE AND CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATES, 1979–80

Question,

That a further supplementary sum, not exceeding £2,054,656,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges for Defence and Civil Services for the year ending on 31st March 1980, as set out in House of Commons Papers 269, 270 and 304,

put and agreed to.

Orders of the Day — DEFENCE AND CIVIL ESTIMATES 1980–81 (VOTE ON ACCOUNT)

Question,

That a sum, not exceeding £23,238,937,800, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for Defence and Civil Services for the year ending on 31st March 1981,as set out in House of Commons Papers 271, 272 and 274,

put and agreed to.

Bill ordered to be brought in upon the foregoing resolutions by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. John Biffen, Mr. Nigel Lawson and Mr. Peter Rees.

Orders of the Day — CONSOLIDATED FUND

Mr. Lawson accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the service of the years ending on the 31 March 1980 and 1981: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 99.]

Orders of the Day — NATIONAL INSURANCE (CONTRIBUTIONS AND EARNINGS LIMIT)

The Minister for Social Security (Mr. Reg Prentice): I beg to move,
That the draft Social Security (Contributions, Re-rating) Order 1979, which was laid before this House on 22 November, be approved.
The draft order is closely related to the Social Security (Contributions) (Earnings Limits) Amendment Regulation 1979, which my right hon. Friend the Secretary of State for Social Services made on 20 November 1979 and laid before the House on 22 November 1979. The order and the regulations both affect the contributions of employees and their employers, and the Government Actuary's report accompanying the draft order sets out the likely effect on the National Insurance Fund of both instruments. I therefore seek leave of the House to discuss the regulations as well as the order during this debate.
My right hon. Friend has carried out the review of national insurance contributions which he has to make each year under the Social Security Act 1975, and the draft order now before the House provides for the changes in contribution rates and earnings and profits limits which he considers are necessary from next April.
I shall start by giving details of the changes and how they will affect individuals. I shall deal first with class 1 contributions—that is, those paid by employed earners and their employers. The order proposes increases in the rate of class 1 contributions of one-quarter per cent. for both employed earner and employer. The proposed increase in the employer's contribution will, however, be partially offset by a reduction of ·05 per cent. in the employment protection element of the contribution which has been proposed by my right hon. Friend the Secretary of State for Employment under separate regulations.
The lower earnings limit for class 1 contributions will be raised from £19·50 to £23 a week and the upper earnings limit from £135 to £165 a week. These changes to the earnings limits are in line with the requirements of section 1 of the Social Security Pensions Act. Thus the lower limit approximates to the rate of

the basic retirement pension, which is now £23·30 a week, while the upper limit is about seven times that rate.
I think that the House will be aware that the upper limit under the terms of the Act should be between six and a half and seven and a half times the current basic pension rate.
For employees earning up to £135 a week, the increase in contribution will range from 4p to 43p a week. Employees earning more than £135 and their employers will, in addition, have an increased liability because of the raising of the upper earnings limit to £165 a week.
The combined effect of the changes to the contribution rates and to the earnings limits will result in a maximum increase for the employee—at earnings of £165 a week—of £2·37 where the employment is not contracted out and £1.69 where it is contracted out. It is the nature of the scheme that, when the upper earnings limit is raised, those at the higher end of the limit have a once-and-for-all higher increase than is due for the average employee.
I now turn to the position of the self-employed. The draft order provides for the class 2 contribution to be increased from £2·10 to £2·50 a week. No change is proposed in the rate of the class 4 contribution, but the range of profits or gains on which the contribution is levied is being raised. Under the draft order, the range will be from £2,650 to £8,300 a year in place of the present range of £2,250 to £7,000 a year.
The effect of these changes is that for contributors with profits of up to £2,650 there will be an extra liability over the year of up to £21·20. For those with profits of between £2,650 and £7,000, there will be very little overall change because over this range of earnings the combined class 2 and class 4 contributions will still represent about 5 per cent. of earnings. For those with profits above the old upper limit of £7,000, there will be varying increases rising to a maximum of £66.20 a year at the new upper limit of £8,300.
There are two remaining changes which the draft order makes. It raises the level of earnings below which a self-employed person may be excepted from liability for class 2 contributions from £1,050 to £1,250 a year. It also raises the


amount of the voluntary class 3 contribution from £2 to £2·40.
These changes fall into two broad categories. The changes to the flat-rate contribution rates and to the earnings and profits limits are to enable them to keep pace with rises in the general level of earnings and with increases in benefit rates. Those to the percentage class 1 contribution rates are necessary, as the Government Actuary's report makes clear, to ensure that income and expenditure of the National Insurance Fund remain broadly in balance in 1980–81.
There are two main reasons to anticipate higher expenditure from the fund during that year. One is certain and the other is probable. First, there is the fact that the pensions and other benefits were increased by about 19½ per cent. a few weeks ago. This will lead to extra expenditure in the financial year 1980–81 of about £2¼ billion. The second reason is that we have had to make a working assumption of higher unemployment. For this purpose, an average figure of 1·6 million has been adopted for the financial year 1980–81.
It might be argued by some hon. Members that the fund has a big surplus at the moment and that it should be possible to run it down. I put the surplus into perspective. The figure of the proposed balance under these changes—nearly £4½ billion—sounds large. It should be seen in the context of the fund, whose income and expenditure are each expected to exceed £15 billion in 1980–81. Although the balance has been increasing in cash terms, it has been falling steadily in terms of the demands on the fund. The balance represented 37 per cent. of annual expenditure at the end of the last financial year. As the Government Actuary's report makes clear, this figure is expected to fall to 34 per cent. by the end of the current financial year and to 29 per cent. of expenditure in 1980–81 by the end of that year.
The increase in class 1 rates is the maximum which can be made by order under the Social Security Act 1975. The Government are considering what action to take now that this margin has been used up. The increases in contributions will obviously be unwelcome—as they always are—to contributors, but they are necessary to permit the scheme to pay

its way while protecting benefits against inflation. I therefore commend the order to the House.

Mr. J. W. Rooker: The Opposition think that it is right to debate this order on the Floor of the House for the same reason as Government Members thought it necessary to do so when they were in Opposition. We are dealing with substantial sums of public money. We are discussing an increase in the National Insurance Fund of about £2 billion between the years 1979–80 and 1980–81.
We also want to debate the order because it is the first example under this Government of what is, in effect, a tax increase. That is contrary to all the loud talk during the election campaign and since about their being a tax-cutting Government. We are discussing a tax increase. On 5 December last year the Secretary of State said that, strictly speaking, the sums involved were not taxation. He said that he suspected that for most people their national insurance contributions had more of the quality of taxation than they used to have. That remains the case.
This is not a minor order. Some people will have to pay substantial increases as a result. Those increases will wipe out most, if not all, of the tax cuts in the Budget. Government Members have complained about this order. I make no complaint, but we must discuss it.
The Minister said that the increased earnings limit above which national insurance contributions are not paid at the normal percentage is about seven times the lower limit. He said that the law requires that this is done within a certain band. There have been changes because last year, during a debate which I did not attend, the Secretary of State said that there was nothing immutable about the ratio of seven. Clearly, it is immutable because it is in legislation. That is why many people will have to pay higher national insurance contributions.
Someone earning £165 a week will have to pay £2.37 a week maximum increase. The employer will pay £3.33. My personal view is that there should not be an upper earnings limit. If we abolished the upper limit we should collect £7 million or £8 million extra, which


could be used for the National Health Service. It is no good the Secretary of State mumbling. Government Members have criticised the order. An early-day motion, tabled by the hon. Member for Northampton, North (Mr. Marlow) and supported by one other hon. Member, the hon. Member for Newark (Mr. Alexander), states that the increase wipes out gains in the Budget and should not be proceeded with for people of that earnings level. The motion states that it should be reduced forthwith.
The Government cannot have it both ways. I accept that they are justified in Imposing the increases because benefits have to be paid for; there is no dispute about that. We wish that more benefits were in the pipline, because in a Bill that we are to debate next week the Government will seek to cut benefits to pensioners, and that will have a direct effect on national insurance contributions in the future.
The Minister has made clear the other reasons for the increases. The Government were instructed to make certain assumptions. It is assumed that prices will increase by 14 per cent. in the next year, that earnings will increase by 14 per cent. and that there will be a catastrophic increase in the average level of unemployment from 1·25 million up to 1·6 million. Those are averages. The figures will be substantially higher than that at the peak. If there is any variation, the figures will be thrown haywire.
In his report, the Government Actuary stated:
The assumption on the total number of unemployed shows an increase to a level higher than in recent experience. It is therefore unusually difficult to estimate the proportion of the total who will not be entitled to benefit from the National Insurance Fund.
Therefore, there is every possibility that, with such a large increase in the assumptions given to the Government Actuary, before the end of the financial year the National Insurance Fund could be in trouble. Of course, there is a surplus, and the balance is being run down. As the Minister said, it is 29 per cent. of expenditure forecast at the end of 1980–81 compared with 37 per cent. at the end of 1978–79. That is a substantial decrease in anyone's estimation. Of course, the then Opposition criticised the previous

Labour Government for forecasting the decrease, which has taken place this year, to only 34 per cent.
Although the Government Actuary has been given these assumptions on which to work, it must be made clear that the figures that he provides for the House and the Government are only as good as the assumptions that he is given in the first place. As the right hon. Gentleman said last year, when he referred to feeding computers, if one puts rubbish in, one will get rubbish out.
Having been given a large increase in assumptions of unemployment such as this one, I must ask the Minister to assure us that there will be no cutback in benefits if unemployment goes above the average of 1·6 million, as we have seen forecast. Clearly, the Government will not want to propose tax increases, which, in effect, is what they are doing tonight.
The obvious alternative mooted by some Ministers—leaked in the press—is to cut the benefit; in other words, to cash limit the National Insurance Fund. We would like to know the Government's thinking on this matter, bearing in mind the large qualification that the Government Actuary has put in paragraph 9.
There is another legitimate point that should be raised, but I suspect that the Government will pooh-pooh it. It is raised every time we discuss public expenditure and the raising of the taxation to pay for it. I refer to the fact that we do not discuss the raising of taxation at the time that we discuss the form of the expenditure. Will the Secretary of State consider allowing us to debate the benefits order increase at the same time as the ratings increase? He will realise that, for the Opposition, it would be extremely useful to debate both together, because he made the same point last year. He is now a member of the Government but he has not been able to do anything about it in the short time that he has been in office.
The Secretary of State for Social Services (Mr. Patrick Jenkin): We are bound by previous legislation.

Mr. Rooker: The Government are in control of legislation. They have the Social Security Bill before the House. If they are bound by previous legislation, they can change it. They have obviously changed their tune since they moved from


the Opposition to the Government Benches. They realise that it is inconvenient for an Opposition to raise the two sides of the balance sheet if they are debated several months apart—July to December. Nevertheless, it is a legitimate point. It is raised generally in terms of the public expenditure White Paper and the Chancellor's annual Budget.
We are dealing with substantial sums of money. The inflow and outflow are in excess of £15 billion. It is one of the largest areas of Government expenditure, and that is where the Government are looking to make cuts. They are looking to make cuts not in defence but in areas of massive expenditure controlled by the DHSS. This time, we have a team of Ministers who are not fighting in the DHSS corner. Therefore, we know that it will be walked over. Cuts in that Department will be easy to achieve. I suggest that it is legitimate to debate the income to the the fund at the same time as the benefits. We shall come back to this point in the legislation that is going through the House this year—and next year, if necessary.
It would certainly be out of order to widen the scope of the debate. Nevertheless, the Government have broken many promises since they came to power.

Mr. Alan Clark: Promises?

Mr. Rooker: Yes, promises. This is another promise that they have broken by raising taxation. I do not disagree with that. The largest burden is on the broadest backs—people earning in excess of £8,000 a year. We are not complaining about that. The Government are saying to middle management "We have given you this incentive Budget", and a few months later they are taking away all the supposed gains from that Budget. [Interruption.] Of course it is within the order. If the hon. Gentleman wishes to intervene, I will gladly give way to him. It is in the order, which he clearly has not got with him, so I think that he had better keep quiet while in a sedentary position. The people who the Government said would gain most from the Budget are, if they lost then, now losing the rest of what was left as a result of the order.
I make no complaint about that. The fact is that the Government have taken

this action to raise taxation. The idea of the earnings-related scheme was that there would be an inflow into the fund and that it would not be necessary to keep changing the percentage rates. As the Secretary of State said when in Opposition, we almost had a bipartisan policy on pensions. We clearly do not have such a policy on the uprating of pension benefits. We now have ping-pong politics on pensions.
The Secretary of State said when in Opposition that there would be an inflow into the fund because as earnings increased they would pay for the outgoings. This has not happened, and because of the forecast increase in unemployment it has been necessary to make some savage increases.
Last year there were great complaints about the increase that the self-employed would have to pay. I calculate that they are now being required to pay an increase of about 19 per cent. on their class 2 contribution. The other limits have been increased by 18 per cent., 22 per cent. and 17 per cent—substantial increases in anyone's book. They are increases that this Government were pledged not to make.
The two hon. Members who tabled the early-day motion were clearly tipped off—certainly other Conservative hon. Members were—not to sign motions contradicting the Government. They are not here tonight to put their words or even their votes where their mouths were on that motion. It is a tragedy that this has happened. I did not give them notice that I would refer to them; I did not think that there was any need to do so as they had tabled an early-day motion.
When this order comes before us, with its substantial increases to be paid by people whom this Government were pledged to look after with their tax-cutting Budget, it should be known to the country at large that this Government have broken yet another election promise.

Mr. Frank Field: The Minister said that the order was largely a measure increasing contributions and that it would be welcome for that reason. But I welcome the fact that I shall be paying increased contributions, because it we are to do a fair deal by the poorest


in the community we must ask "Who will pay for it?"
We are debating an increase in contributions at a time when our attitude to the poorest is changing fundamentally. That can be seen by the fact that we are changing our legislative commitment to the poor. We are changing the formula of the Labour Government, which was to raise most national insurance benefits in line with prices or earnings, to one which is in line with prices. We now have murmurings from the Conservative Back Benches that even that commitment should be scrapped.
Our attitude to the most hard-pressed in the community vary, from the view that we are our brother's keeper, through the Government's present proposal, which is to tolerate the poor, to the idea that the poor are simply a burden, which is how some people view them.
I have few hesitations about supporting the order, which is to pay for increased benefits for larger numbers of hard-pressed people in the Welfare State, but I should like to put two questions to the Minister. I shall be grateful if he will consider them and perhaps write to me.

Mr. Rooker: It must be made clear that while there has recently been a substantial increase in old-age pensions and long-term benefits, which must be paid for, the basic reason for the order to raise contributions is not to grant extra and new benefits; it is the catastrophically high levels of unemployment that this Government are about to create.

Mr. Field: Certainly, but we are drawing funds from the National Insurance Fund, and from the fund we also at present pay those who are entitled to national insurance unemployment benefit. I am pleased to make my contribution to those who are bearing my share of today's unemployment. The Government have already embarked on an ambitious reform of direct taxation. In the last Budget, we saw many of the ideas that they put together in Opposition brought to fruition. We also understand that Lord Cockfield is about to report on the reform of capital taxation. The only area of direct taxation that has not come up for review by the Government is the poll tax, the national insurance contribution.
There are two powerful reasons why a similar review of this form of taxation should be undertaken by the Government. First, this is the most regressive form of taxation. The Under-Secretary was kind enough to provide me with figures earlier this Session. The poorest women contribute 6·5 per cent. of their earnings, whereas the richest women workers who earn three times the average earnings contribute only 3 per cent. of their earnings. The poorest pay at more than twice the rate paid by the richest. I hope that all hon. Members are concerned by that.
A more worrying reason for initiating a review is the effect of the poll tax on the poverty trap, the overlap of taxation and benefits. The introduction of the reduced band of tax is totally wiped out for low-paid workers once national insurance contributions are added. The loss of fares and free school meals plays but one important part in the poverty trap into which low-paid workers find themselves increasingly falling. The Government should think carefully about undertaking a review to raise necessary funds for the social security budget.
As with other Ministers, the right hon. Gentleman performed the usual trick at the Dispatch Box when he was talking about the surplus of the fund. He told us that the surplus will disappear. When we table questions, we are told that the National Insurance Fund is in significant surplus. Will the Minister tell me, not necessarily tonight, given that at any one time the fund is in considerable surplus, for what purpose the surplus is to be used? Is it to be used by other Government Departmens to reduce public sector borrowing, or is it to be left to lie idle? Perhaps that is part of the answer why Ministers of both parties are loth to run the surplus of the fund at a lower level than the current level.
I promised to make a brief contribution. It has been almost a brief contribution. I rose to support this crucial measure to pay for benefits in the Welfare State.

Mr. Prentice: With permission, Mr. Deputy Speaker, I shall speak briefly again. I should like to comment on the two speeches that have been made. The hon. Member for Birkenhead (Mr. Field) lectured us about the change in attitude


to poor people. I wish that we did not have to listen to these sanctimonious sermons from him and other hon. Members, unless they are backed up by evidence. A few weeks ago we saw the highest increase in pensions and other benefits in the history of the scheme. That increase is no more or less than would have been introduced by the Labour Party if it had won the election. Let us not have pensioneering on this point. I do not claim to have given a penny more than a Labour Government would have given, and Labour Members know that they would not have given a penny more than we have given.

Mr. Field: I apologise to the House if I sounded sanctimonious. I shall try to do better next time. As, whenever I speak, the right hon. Gentleman normally spends his time laughing and giggling on the Front Bench, I am amazed that the points registered with him. The Government were committed to a certain increase in benefits by the legislation that was on the statute book. I have no objection to the Government claiming credit for that as they introduced it. However, they were legally bound to do so.
We now see a change of that commitment from the most favourable one of raising benefits in line with prices or earnings to a level in line with prices only We are now hearing from Government Back Bench Members the suggestion that even that commitment should be scrapped. That was what I meant by a change in attitude. I was not trying to derive a political advantage. It is a worrying trend. That was why I rose tonight, with pleasure, to support the order.

Mr. Prentice: I understand that the point the hon. Gentleman makes has nothing to do with the order. The speech he made tonight is one which he would like to make if he is called in the debate next week. If he is called to speak and makes that point, or if other hon. Gentlemen make it, we shall answer it. We have a case to make which, I think, is overwhelming.
The hon. Member for Birmingham, Perry Bar (Mr. Rooker) asked whether we would review the whole financial basis of the national insurance scheme. The short answer is "No". We are operating

the 1975 Act, which was agreed between, the main parties in the House after too many years of the swapping of rival pension schemes between the parties. The system deserves to stand the test of time. We should not be doing a service to present or future generations of pensioners by the root-and-branch change to which the hon. Member referred.
I was surprised when the hon. Gentleman referred to the need to raise the upper earnings limit and, indeed, to abolish it.

Mr. Rooker: That was a personal view.

Mr. Prentice: It is slightly curious that a Front Bench speech should contain a personal view, although that is not necessarily out of order. In a debate of this kind, one would expect to hear the views of the Opposition rather than a personal view being put from the Front Bench.
The basis of the 1975 Act was agreed between the parties. Its main architect in the then Labour Government was the late Brian O'Malley, who made a tremendous contribution to progress in this area. The scheme was agreed between the parties. It included the concept of an upper earnings limit. It should stand the test of time.

Mr. Dennis Canavan: The right hon. Gentleman has changed parties.

Mr. Prentice: I have not changed at all.
This evening I put forward an order within the terms of the 1975 Act. If it were not within those terms, I should not be in order in moving it in this fashion. We have not changed the Act. We have no proposals to do so. We are asking the House to approve a regulation made under the Act, just as 12 months ago the Labour Government moved a similar order to approve an uprating within the terms of the 1975 Act.
I was asked what use was made of the surplus. The short answer is that it is invested in Government and local government bonds. It earned for the funds, based on the last year for which figures are available, £442 million. That is an additional reason to the others that I gave earlier for having a substantial surplus, as it serves this purpose.
We again heard the cliche about the Government breaking promises. On the contrary, the November uprating was promised in the election. We promised to do it within the terms of the law, the 1975 Act, as it stood, to pay for it from the National Insurance Fund and to replenish the fund as required. That was the promise, which has been carried out.
I am becoming tired of the constant cliche from the Labour Benches about broken promises. If hon. Members are going to make that accusation, not only from the Opposition Benches but in the frequent and monotonous appearances of the hon. Member for Grimsby (Mr. Mitchell) in party political broadcasts, they should prove it. We are repeatedly told that promises have been broken, but we are never told what those promises are. The Opposition should be specific. If they have a case, they should attempt to make it. We will answer it. They should not indulge in generalised smears. These bring only further discredit on the Labour Party.

Mr. Robert Mellish: I can point to at least one issue. It has nothing to do with this debate, but the right hon. Gentleman has asked for proof. What about mortgage rises? That is a broken promise.

Mr. Prentice: That is not true. The point does not arise in this debate. It is, nevertheless, not true that any specific promise was made on the figure of mortgages.

Mr. Mellish: The right hon. Gentleman should read his party's manifesto.

Mr. Prentice: I should like to return to the point that this is a form of taxation. I took the trouble to read the speech of my right hon. Friend the Secretary of State in the debate a year ago. He will be glad to know that I enjoyed reading it and agreed with everything he said. My right hon. Friend said that people nowadays regarded the deduction for national insurance purposes as a form of taxation. I am sure that this is the psychological truth. It was true a year ago. It is true today.
That does not mean that the order a year ago had to be opposed. Indeed, my right hon. Friend did not oppose it any more than the Opposition are opposing the order today. But we recognise that

people see the gross and net figures on their pay packets and are concerned about the difference between the two. They do not always analyse the component parts in detail.
To say that these increases in contributions wipe out the tax concessions of the Budget is to get the figures totally wrong. A direct comparison cannot be made. The tax concessions in the Budget dated from April 1979 and the increases about which we are talking will date from April 1980. Even if one put the two together and took the most extreme case of someone earning £165 a week, there would still be a net gain, within a year, of between £136 and £185. For the vast majority of people, there would be a much bigger net gain, depending on their rate of pay.
I should like to comment on the timing of debates. I am sure that everyone agrees with what my right hon. Friend said a year ago—that it would be much more satisfactory if a way could be found of debating contribution changes and benefit changes at the same time and in the same context, taking the package as a whole. That objective has eluded successive Governments. It eludes us today for the practical reason that benefits are increased in November. There is no practical possibility of that being changed. The level of the increase is bound to be part of the Budget arithmetic and is normally announced during the Budget speech. On the other hand, contributions are changed at the beginning of the tax year because their collection is related to the tax system and a decision has to be made and announced now to give people proper notice.
These two sets of decisions, under Labour and Conservative Governments, have been made some months apart. There does not seem to be any practical way of meeting the dilemma. If there were, we would try to achieve it.
The hon. Gentleman said that the estimates of the Government Actuary could be wrong. The Government Actuary has to make a number of assumptions. They are assumptions given to him by the Government. In the past, many of them have turned out wrong. The most common error has occurred in the likely increase in earnings. We have gone through a period of inflation in which, in more


years than not, earnings have increased to a greater extent than had been assumed. The prospect for earnings in 1980–81 has to be seen alongside the prospect for unemployment.
The assumption of an unemployment level of 1·6 million may be too high or too low, but if we are to stand a reasonable chance of its being lower the most important requirement is that wage and salary settlements over the next few months should be within reasonable limits. The experience of recent years shows that inflation is the mother and father of unemployment.
If Labour Members wish to serve the community and the pensioners, they will argue for restraint and good sense in wage bargaining in the coming months.

Question put and agreed to.

Resolved,

That the draft Social Security (Contributions, Re-rating) Order 1979, which was laid before this House on 22nd November, be approved.

Orders of the Day — REGISTER OF ELECTORS (SERVICE VOTERS)

The Minister of State, Home Office (Mr. Leon Brittan): I beg to move,
That the Representation of the People (Amendment) Regulations 1979, a copy of which was laid before this House on 22nd November, be approved.
I hope that it will be convenient for us to consider with this the Representation of the People (Scotland) Amendment Regulations 1979, a copy of which was laid before this House on 21 November. One set of regulations deals with England and Wales, the other with Scotland.
In essence, of course, the regulations contain the same provisions and indeed follow, in all but one particular, the regulations that the House approved earlier this week relating to Northern Ireland. All three sets of regulations were approved last week by the House of Lords.
Both sets of regulations before the House have three effects. First, they amend existing regulations so as to remove the requirement that the names of Service voters and merchant seamen should be marked on the register respectively with the letters S and M. I know that many right hon. and hon. Members have, over the years, received representations about these special markings from Service men and their families. There has been a fear that they lead to unwanted attention as a result of the identification that is possible from those markings.
I recognise that, conversely, it can, on occasion, be useful to party canvassers and others, especially at election time, to know who are Service voters and merchant seamen, but that consideration is outweighed by the fact that the special markings undoubtedly act as an impediment to electoral registration. That view was supported in the wide-ranging consultations that we had in the summer with the political parties, the local authority associations, the Services and the trade unions and staff associations representing merchant seamen on various aspects of the Service voting arrangements.
The second effect of the two sets of regulations is that parish and community councils are added to those who are entitled to receive free copies of relevant


extracts from the electoral register. At present hon. Members and prospective parliamentary candidates and their agents may receive free copies of the whole register and, in respect of their particular areas, local councillors and local election candidates or agents may receive extracts.
The National Association of Local Councils, which represents the interests of parish and community councils at national level, has represented for some time that such free copies should also be made available to parish and community councils. The Government are fully conscious of the value and importance of the work of local councils and have therefore incorporated that proposal in the regulations.
The third effect of these regulations is to increase the fee for copies of the register to persons who do not qualify for free or discounted copies—that is, commercial bodies such as market research organisations or mail order firms. At present, if supplies of the register are available after those statutorily required are supplied, copies may be sold at a rate of 50p per 1,000 or part of 1,000 names. These regulations increase the fee to £1 per 1,000 or part of 1,000 names. This is partly to take account of inflation since February 1978, but also it more nearly reflects the true cost of production of the register. I do not see why those who seek to use the register for commercial purposes should not pay a commercial rate for doing so.
Ideally we would favour a discretion to each local authority to fix its own fees, as the cost of production of the register seems to vary quite widely from area to area, but that would require substantive legislation for which there is no prospect in the present Session. In the meantime, therefore, the present increase will enable local authorities to receive a more realistic reimbursement of a proportion of their costs.
I should emphasise that the discounted fee for extra copies supplied to those entitled to a limited number of free copies remains unchanged by these regulations.
For those reasons, I commend the regulations to the House.

Mr. George Cunningham: The Opposition support all three minor changes provided

for in these regulations. I do not want to say much about them because they have been covered in discussions and debates on the Bill introduced by the hon. Member for Woking (Mr. Onslow) on this subject.
The Minister talked about the possibility of allowing local authorities to charge a different fee according to the cost that they thought fell upon them as a result of producing the register. I hope that he will not go down that road. He said that he would not do so tonight, but I hope that he will not go down it at all. It is an old-established habit to provide copies of things like this for a fixed fee. At one time in my life I had a great deal to do with the practice of making available not just lists of electors but lists of electors and the way they voted before the Ballot Act. When legislation was first passed in 1708 or thereabouts to entitle any member of the public to obtain a list of those who had voted and the way in which they had voted, even then the fee was laid down by Parliament from the centre.
We shall only get into great difficulties if local authorities are allowed to charge a sum of their own choosing for this service. In future, because of the computerisation of registers, and so on, the cost of producing them will harmonise, and therefore we do not need to open up problems that would arise if a local authority decided to charge a really excessive fee.
I wish to raise a point on behalf of my hon. Friend the Member for Goole (Dr. Marshall), who is unable to be here tonight. It arises in part in the context of these regulations. In some parts of the country, although not in mine, complaints have arisen from political parties and the like about the late availability of the lists of postal and proxy voters. If those lists are not available in good time for an election, political parties and other campaigners have a problem in distributing their relevant literature.
If there is a problem of that kind in some parts of the country, I hope that the Home Office, in the guidance that it issues to returning officers, will indicate that those lists should be made available as soon as possible. It is an essential part of the democratic process that those who are standing for election and those who are supporting them should be able to get their literature and views across to


those who are voting as quickly as possible. If there are parts of the country where that is being impeded by excessive delays in getting the lists out to those concerned, I hope that the Minister will do everything that he can to change the situation. If, in the light of my remarks, the Minister can give an assurance in writing either to me or to my hon. Friend, we shall be most grateful.
We commend the passage of both sets of regulations to the House.

Mr. Peter Viggers: Since the Representation of the People Act 1977, two things have upset the wives of Service personnel. One is the fact that they have to register in a special way for Service voting. That has now been rectified by the Private Member's Bill brought forward by my hon. Friend the Member for Woking (Mr. Onslow). I am delighted to see him in the Chamber this evening.
The other thing which has disturbed the wives of Service personnel is the fact that they have the distinguishing mark S against their names in the electoral register. This may seem, to those with no direct experience of the point, to be a rather unimportant matter. To the wives in question, it is a matter of fundamental importance, and they were outraged that they were treated as goods and chattels of their husbands. I had hundreds of letters on this subject from people in my constituency reflecting the outrage—no other word will suffice—of the wives in question.
The effect is that in my constituency of Gosport 15,000 Service personnel and wives of Service personnel should have been eligible to vote, yet in early 1978 it was estimated by the electoral registration staff in Gosport—to whom I pay tribute for the care they have taken in the matter—that only 5,000 of those 15,000 had registered. In one area alone, Rowner—where a considerable amount of building is taking place and a larger number of people would be expected to be registered year by year on the electoral register—the number of people registered fell between 1976 and 1978 from 8,700 to 7,100.
It is obviously the duty of all of us in this House to try to ensure that as many people as possible exercise their right to vote. On behalf of the wives of Service

personnel, I welcome the measure. There are more than twice as many Service personnel in the constituency of Gosport as in any other constituency in the United Kingdom; therefore, I can speak with some special authority on the subject.
I should like to pay tribute, from my own knowledge, to the Minister of State, who, I know, has devoted personal interest and attention to the matter. His interest and attention have ensured that this wrong has been righted quickly.

Mr. Tam Dalyell: My friend Bill Lawson, who is known to some Government Front Bench Members as the extremely competent assessor of the Central region, has pointed out that the differences between the costs of printing registers in various parts of the country are not simply marginal—one could understand that—but very substantial. The Minister of State referred to this.
Are there any reasonably readily available figures—I do not ask for them tonight—about the difference in printing costs of registers from one area to another? There would appear to be some staggering differences.
Having been through three elections this year, one is struck by the variation in the competence of the register from place to place. As the hon. Member for Edinburgh, Pentlands (Mr.Rifkind) and the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) may remember, there were during the devolution referendum a great many complaints—followed up, no doubt, in the general election—of whole areas where those whose job it is to ascertain who lives in what house had done their job in a pretty sloppy fashion. I hasten to add in the same breath that in other areas the register was rather well compiled.
I suppose that during a general election we all concentrate on our own neck of the woods and our own patch. I have to speak for West Lothian, where I think the job is fairly competently done, but having seen the position rather more widely in Scotland—I do not seek to intrude into the position in England, where things may be more efficiently done in this respect—it was obvious that there is no room for complacency.
I ask the Minister of State to say whether there is any way of making sure that the job is properly done. I am not suggesting that pay should be deducted, but there is a widespread feeling that many people who have been paid a lot of money to do the job of registration have taken a number of short cuts in so doing.

Mr. Cranley Onslow: I speak briefly for one main purpose, and that is to express my thanks to my hon. and learned Friend the Miniser of State and the hon. Member for Islington, South and Finsbury (Mr. Cunningham) for their co-operation and help in passing into law—as I hope that it soon will be—the main part of the legislation, of which this measure is, to some extent, a side wind.
We are discussing regulations to remove the S and M registrations, which it is accepted are no longer necessary. It is desirable that they should be removed. I have not had a chance in the House to place on record my personal thanks to both my hon. and learned Friend and the hon. Gentleman for the great help that they gave me in getting my Representation of the People Bill through on the nod. It would be wrong if the "nod" procedures were so to be observed that the thanks that are due to both my hon. and learned Friend and the hon. Gentleman were not placed formally on record. I gladly and willingly do that.
As my hon. Friend the Member for Gosport (Mr. Viggers) has said, we have in this evening's business, and in the Private Member's Bill, done much to reverse a genuine and heartfelt grievance on the part of many electors. It must always he our objective, as elected Members of the House, to protect the right to the franchise of all those who otherwise might be prevented from exercising it, to extend it wherever we can and to protect it as a sacred right. I am correspondingly grateful and glad to have had this opportunity to place that on record.

Mr. Brittan: With the leave of the House, Mr. Deputy Speaker, may I say that I appreciate the kind remarks made by my hon. Friends the Members for Gosport (Mr. Viggers) and Woking (Mr. Onslow). The House owes a great debt

of gratitude to them for raising these issues. I am pleased that one of the earliest things that I have been able to do in my present position has been to assist in making the changes, of which these regulations represent a part.
My hon. Friend the Member for Woking is right to relate the regulations to the Bill that he sponsored because they are a package. Together, they will restore the franchise to those who have not been able, or have not felt able, to exercise it. I do not think that that is an exaggeration.
Let me deal with the specific matters raised by the hon. Member for Islington, South and Finsbury (Mr. Cunningham) in expressing the view that he has about the desirability of charging different fees in different places and the 1708 precedent. I must confess that I had not realised that he was able to pray in aid a precedent quite as ancient. It is nice to see the Labour Party regarding a precedent going back to 1708 as something that should not be touched without great care and certainty. The hon. Gentleman has put up a marker, and I—

Mr. Dalyell: I do not think that anything after 1707 suits my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham).

Mr. Brittan: Touching on that particular sensitivity, we are all in the same boat.

Mr. John Home Robertson: Oh, no.

Mr. Brittan: With the exception of the hon. Member for Berwick and East Lothian (Mr. Robertson), most Members in the Chamber tonight are in the same boat. I see the difficulties. We shall not embark on that lightly, and I shall consider the point which the hon. Member for Islington, South and Finsbury made.
The hon. Gentleman raised on behalf of the hon. Member for Goole (Dr. Marshall) the question of the late availability of the postal and proxy registers. The hon. Gentleman will appreciate that that does not arise directly from these regulations. I make no complaint of that as it is convenient that he should bring the matter to my attention in that way. I merely say that it does not arise so that he understands why I am not able


to give an explanation or answer in the debate. However, I say through him to the hon. Member for Goole that, if he has any substantial evidence, it will be helpful if he gives me details so that I may examine them to ascertain whether something has gone wrong and, if so, what can be done about it. When that happens, the matter will receive my personal attention.
The hon. Member for West Lothian (Mr. Dalyell) spoke about the huge differences in costs. That is so, but I am not sure that it is so remarkable as the hon. Gentleman seemed to imply. I accept that there are different conditions in different constituencies. I think of the various constituencies with which I have been involved. The problem in inner urban constituencies is to ascertain who lives in multi-occupied accommodation. In rural constituencies sheer distances present problems. A nicely compact suburban constituency is, no doubt, quite easy to deal with. I do not necessarily accept that the differences in costs are in any sense sinister.
I turn to the accuracy of the register. The hon. Gentleman has been good enough to confine his remarks to registers north of the border. I do not claim that registers south of the border are notably more accurate than those north of the border. I shall draw the attention of my right hon. Friend the Secretary of State for Scotland to the hon. Gentleman's remarks.

Mr. George Cunningham: It always comes as a surprise to me to discover the number of electoral areas where it is not the practice to make use of form A but to rely on the door-to-door canvass. One trouble about the door-to-door canvass is that, if people are not in when the canvasser calls the first time, they are often not in on the second and third occasions. That will be more and more the case as more and more wives are working.
It is a matter for consideration—I put it no higher than that—whether the sending out of form A should be an obligatory part of the registration officer's duty. I am not sure what view I would finally take upon that, but I think it is time we reconsidered the point.

Mr. Brittan: As the hon. Gentleman will know, we are reconsidering all these matters. The accuracy of the register and the various ways of producing it to make it more accurate are under consideration. I take aboard the point that he has made.
I think that I have dealt with the issues raised in the debate. I am glad that the regulations appear to command the support of the House.

Question put and agreed to.

Resolved,

That the Representation of the People (Amendment) Regulations 1979, a copy of which was laid before this House on 22nd November, be approved

Resolved,

That the Representation of the People (Scotland) Amendment Regulations 1979, a copy of which was laid before this House on 21st November, be approved.—[Lord James Douglas-Hamilton.]

Orders of the Day — STATUTORY INSTRUMENTS, &c.

Mr. Deputy Speaker (Mr. Bernard Weatherill): To save the time of the House, I propose to put together the Questions on the three motions to approve statutory instruments, Nos. 5 to 7 on the Order Paper.
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &amp;c.).

Orders of the Day — EMPLOYMENT PROTECTION

That the draft Unfair Dismissal (Increase of Compensation Limit) Order 1979, which was laid before this House on 19th November, be approved.

That the draft Employment Protection (Variation of Limits) Order 1979, which was laid before this House on 19th November, be approved.

Orders of the Day — SOCIAL SECURITY

That the draft Social Security (Contributions, Re-rating) (No. 2) Order 1979, which was laid before this House on 28th November, be approved.—[Lord James Douglas-Hamilton.]

Question agreed to.

Orders of the Day — PETITION

High Court Proceedings (Official Report)

Mr. Peter Viggers: I beg to present a petition from Sir Basil Brodribb Hall, Her Majesty's Procurator General and Treasury Solicitor. I ask for it to be read.

The Clerk of the House: The Clerk of the House read the petition, which was as follows:

To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.

The Humble Petition of Sir Basil Brodribb Hall, KCB, MC, TD, Her Majesty's Procurator General and Treasury Solicitor

SHEWETH

1. That the Petitioner is the Solicitor representing the Respondent the Secretary of State for Social Services in an Application pending in the Queen's Bench Division of the High Court under No. D.C. 429/79 in which the applicants are the London Borough of Lambeth, the London Borough of Lewisham and the London Borough of Southwark;

2. That in the said Application the Applicants seek an Order of Judicial Review directed at a Direction of the Secretary of State for Social Services dated 1 August 1979 and varied on 6 August 1979 appointing Commissioners to perform the functions for the Lambeth, Southwark and Lewisham Area Health Authority (Teaching);

3. That in the said action issues arise as to whether the powers of the Secretary of State under section 86 of the National Health Service Act 1977 to appoint such Commissioners were applicable to the Lambeth, Southwark and Lewisham Area Health Authority (Teaching) in this instance;

4. That the Secretary of State for Social Services gave written answers to questions on 5 July 1978, 10 July 1978, and 23 October 1979, and the Chief Secretary to the Treasury gave a written answer to a question on 23 February 1979, and the Chanceller of the Exchequer spoke in the debate on the Address to Her Majesty on 22 May 1979 and made a Budget Statement on 12 June 1979;

5. That the said written answers, speech and statement are reported in the following Reports of Debates of your Honourable House: —


Date
Reference
Column


1978 953 HC
Written Answers
226–7


1978 953 HC
Written Answers
444–5


1979 963 HC
Written Answers
334–5


1979 967 HC
Deb
903


1979 968 HC
Deb
246


1979 972 HC
Written Answers
160–1

6. That the above Reports of Debates relate directly to the issues referred to in paragraph 3 hereof; and that reference is desired to be made in the course of proceedings on the Application referred to in paragraph 2 hereof to the said Reports of Debates;

7. Wherefore your Petitioner humbly prays that your Honourable House will be graciously pleased to give leave for reference to be made to the said Reports of Debates in the course of proceedings before the court on the said application.

And your Petitioner, as in duty bound, will ever pray, etc.

Basil Brodribbs Hall,

Central Buildings,

Matthew Parker Street,

London SW1.

To lie upon the Table.

ST. OLAVE'S HOSPITAL

Motion made, and Question proposed, That this House do now adjourn.—[Lord James-Douglas-Hamilton.]

Mr. Robert Mellish: It is my sad duty tonight to raise the matter of the closure of a hospital in my constituency. The hospital is known as St. Olave's hospital. It is in the heart of my constituency and I was its chairman for 14 years, from 1950 until 1964.
It was previously an old infirmary, and when the National Health Service came into being I was appointed by Aneurin Bevan as the chairman. I pay tribute to those who were colleagues of mine at that time. They worked very hard. We had reasonable funds and we rehabilitatated that hospital to the credit of the constituency. Down those years it has become for me a personal matter and one that I hope the House will understand.
It has faithfully served the local people and has been a progressive hospital. It readily recognised that the needs of Guy's hospital—one of the great teaching hospitals of London—were paramount and opened its doors to Guy's. It was very unusual for a general hospital to do that. We opened our doors to Guy's and its people came in to St. Olave's. Its students were able to gather there all the great teaching materials of that day and age. For years we had a happy relationship with Guy's hospital.
St. Olave's also did another unique thing. It opened its doors to mentally ill patients. It was the first general hospital in the country that agreed to open its doors to receive psychiatric patients. We were asked to do it because it was pointed out at that time that those types of patients would not go to what was called "Bexley"—it was known as the asylum—but would come


to a hospital like St. Olave's because it was a general hospital.
I remember very well that we had a discussion on what we should call the hospital. It was suggested, after argument, that it should be called a psychiatry unit. I said "Don't do that, because I can't spell psychiatry' ". It is the silliest word I ever heard anyway. My colleagues then said that we should call it a mental health hospital, but I said that that would defeat the objective.
So we settled on the title of "day hospital" and for a considerable time mental patients were admitted and a brilliant job was done. I hope that I have made it sufficiently clear that this is not a parochial, insignificant hospital which does not cater for the wider aspects of medicine. We have co-operated with a teaching hospital and with psychiatrists. We did even more. Out of our own budget—I well remember that it caused great hardship—we also opened what is known as the New Cross hospital. The hospital has a history. I hope that it has a future.
Others took my place in 1964 and did an equally good job. They did a magnificent job. In 1975 the present Secretary of State for Industry presided over the reorganisation of the Health Service. It was a tragedy. That was said at the time and it has been confirmed. Until the reorganisation, hospitals such as St. Olave's stood on their own two feet and had their own budgets. Teaching hospitals had their own budgets separately, because their demands were different.
I hope that I do not sound too bigheaded, but I was not only chairman of the hospital management committee, I was a member of the board of governors at Guy's hospital and a member of the regional hospital board. I saw the events all the way down the line. I saw the heartaches, the problems and financial troubles of the teaching hospitals, which are different from those at St. Olave's.
When the right hon. Member for Down, South (Mr. Powell) became Minister of Health, he set up a committee under Professor Guillebaud to investigate the entire financing of the hospital board. That was before the right hon. Member for Leeds, North-East (Sir K.

Joseph) starting mucking about. Guillebaud said that the financing of the hospital service was a credit to the nation. I gave evidence to his committee. He said that he found it incredible that, under the sub-heads, we had been able to control finance almost to shillings and pence. However, that was not enough for the right hon. Member for Leeds, North-East. He could not leave well alone. He changed the whole structure. He introduced an area health authority—and that is the key to the trouble. The area health authority embraced Guy's, Kings, St. Thomas' and Lewisham, all of which are great teaching hospitals. St. Olave's was submerged in that group. Surprise. surprise—funds became uncontrollable.
This Government came into power in May and they found that there was vast overspending. We knew that when we were in Government. The overspending totalled about £5 million. The Government said that the health authority must make some economies. I understand that the authority was not anxious to do that, so it was sacked. In its place commissioners were appointed—Sir Frank Hartley and his colleagues—whose terms of reference were to make economies. In my district, the Guy's district, they were asked to find savings of about £1½million. They accepted the terms of reference. I am not here to attack Sir Frank. It would be callous to take advantage of the privilege of the House. I have told him to his face what I think. It was wrong to accept such terms of reference.
Sir Frank and his commissioners have never seen my hospital. I hope that I may be forgiven for calling it my hospital. They know nothing about it. However, they took advice from the district management team, which said that there was only one way to make economies of £1½ million, and that was to close a hospital The hospital to be shut down, it was said, for reasons best known to them, was St. Olave's hospital. The decision was made to close St. Olave's. I can only say that, when the news broke, we could not believe it. This is a 230-bed hospital. The community health council had continued the magnificent work that had gone on. Every ward had been upgraded. Every bed was a credit to any hospital. There were a first-class operating theatre and first-class kitchens and X-ray facilities. There were a happy staff and


good co-operation with Guy's. The psychiatric patients were well cared for. Every bed was occupied. And they decided to close it. To find £1½ million, there had to be a closure, it was said.
It was said that it was to be a temporary closure. I could not believe that this was a serious move. I have met the Secretary of State and Sir Frank Hartley on two occasions. I have been received with courtesy. I have argued the case. What in heaven's name is meant by the word "temporary"? When is this hospital to be reopened? What indication is there that it will be reopened? It was decided to close St. Olave's hospital to save approximately £640,000 by 31 March. That figure is phoney. I challenge it. It is a lie. It was put forward on the basis of "Shut that down, and that is what you will save". But things do not work like that. The stair at that hospital will have to work somewhere else, at Guy's or New Cross.
It will cost £150,000 a year to maintain the empty hospital. What about that? I am talking to a representative of a Government who believe in monetarism. We had better have some economic common sense and not just emotion. Can anyone justify the closing of a hospital in first-class condition when there is a crying need for the type of care it provides and when the annual cost of keeping it closed is £150,000? Perhaps some of those involved in this decision, including the commissioners and the Secretary of State and some of his colleagues, should be psychiatric patients. I cannot believe that anyone could be so crazy as to talk in this way.
Let us see what has happened as a result of this move. Patients have been taken from St. Olave's and have been crowded—there is no other word for it—into Guy's. The psychiatric patients have been put above the surgical block. There is grave concern there. What have they done with the old people? The geriatrics have been put into New Cross hospital and they have had to find money to rehabilitate wards there. Yet at St. Olave's the wards are empty—and every ward there has been upgraded. Now who is barmy? Who is stark raving mad on the economic argument?
Is the Minister intending to repeat the argument about the saving of £640,000? That is wrong. We all know that those

figures were based on certain assumptions which have not been realised. The problem arose when a wider area was created. I have stated publicly that I do not support the area health authority concept. It was too big. I have always wanted a much smaller unit, something like we had before, when matters could be controlled at district level. To blame St. Olave's for the blunder of a previous Minister in creating a wider distribution of control, which makes financial control impossible, is crazy.
The argument based on the resource allocation working party formula is false. A hospital such as Guy's, which is one of the greatest teaching hospitals in the world, does not receive patients merely from its own district. As a former member of the board of governors, I know that it specialises in the treatment of liver complaints and heart complaints and does such surgical work as transplants. It does not refuse to accept patients because they come from outside the district. It accepts patients from Kent, Surrey, Essex, or wherever. The formula which has been applied ignores the fact that the vast majority of patients treated at such a hospital do not come from the immediate district.
This is a very sad story. St. Olave's has a large number of geriatric patients. Many of my constituents are advanced in years. St. Olave's has done a magnificent job for such people. It constructed another ward at a cost of about £40,000 for geriatric patients who are mentally ill. Yet the ward has not been opened, because of the commissioners' decision that the hospital had to close. It is a scandal.
It is hard to persuade the press to take up stories like this. A picket line has been on duty for 24 hours a day. It has been an extraordinary picket line in that it has been picketing to keep the patients in and has been letting supplies through. It is one occasion in relation to a picket line when the press cannot sneer at the trade unions. This hospital is being penalised and the interests of the patients are being subordinated to the desire to make cuts.
I do not want to make any party political points. I understand the argument about the £5½ million. I am not saying that the commissioners are evil or that the Secretary of State is a bad


man. I am simply pleading for economic sense. This hospital is brilliantly equipped. We must talk about what job it should do. Do not let the Minister start arguing with me from a brief supplied by people who are almost as ignorant as the commissioners—they have not been down there. Let not the Minister try to justify the closure to people who know what it is all about. The Minister should say that, although these proposals were made, the Government will now make it possible for the hospital to carry on with its good work and that all the issues can be discussed. I am willing to play my part.

The Under-Secretary of State for Health and Social Security (Sir George Young): I must congratulate the right hon. Member for Bermondsey (Mr. Mellish) on the balanced and responsible way in which he has conducted his campaign on behalf of his constituents to prevent the temporary withdrawal of in-patient services at St. Olave's hospital. Both my right hon. Friend the Secretary of State and my hon. Friend the Minister of State were very impressed by the sincerity and depth of feeling that he displayed at his separate meetings with them on this subject, a feeling that he has displayed again this evening. No one who has heard the right hon. Gentleman speak about this hospital, with which he has been so long associated, could doubt his devotion to the hospital, its staff and its patients. I congratulate him on the time and energy that he has devoted to it.
Throughout his speech the right hon. Gentleman referred to "the closure". As I shall explain later, the hospital is not being closed.
It is appropriate that St. Olave's should be discussed here. I am told that the floor of one of the blocks of St. Olave's which was damaged in the war was salvaged and used in the rebuilding of this Chamber. The right hon. Gentleman may have been standing on a piece of St. Olave's when he so eloquently put the case for keeping the hospital open.
I am sure that it will be helpful to the House if I explain in some detail how the decision to cease in-patient services at St. Olave's came to be taken, even though this means going over some of the

ground already covered by the right hon. Gentleman.
When we came into office last May, we found that the Lambeth, Southwark and Lewisham area health authority had overspent on its 1978–79 allocation by over £4 million and that, even though it was not required to refund that sum in the current year, it was heading for another massive overspend in 1979–80.
At the beginning of August my right hon. Friend issued a direction removing from the members of the authority all the powers and functions exercised by them, and shortly afterwards appointed five commissioners to manage the area. The House will realise that these decisions are now the subject of action in the courts and it would not, therefore, be proper for me to discuss them further now.
Having taken the trouble to appoint commissioners with a wide range of experience and with the personal qualities required to discharge the great responsibilities given to them, my right hon. Friend would be very reluctant to interfere in the decisions that they have to take or the way in which they set about conducting the business of the area. It would be wrong in principle and unworkable in practice if Ministers were to insist on reviewing particular decisions in the area when all the measures taken to reduce expenditure need to be interrelated. We certainly could not attempt to plan the area's services from the Elephant and Castle—even though we actually work in its domain.
The commissioners are required to bring the spending of the area under control and to ensure that money which has not been allocated is not spent.

Mr. Mellish: The commissioners have said that they cannot and will not discuss this matter with me and my friends because they are under instructions from the Secretary of State. Now the hon. Gentleman is saying that the Secretary of State will not interfere with the commissioners. It all adds up to nothing being done by anybody. Will somebody please give an instruction?

Sir G. Young: The right hon. Gentleman has not got it straight. My right hon. Friend has made it clear that the commissioners must manage within the money that has been made available to


them. We have gone on to say that how they achieve their targets is up to them and that we will not interfere in their management decisions. I see nothing inconsistent in that approach.
When the commissioners took over the area on 6 August, the total estimated deficit was of the order of £5 million on a total budget of £132 million, and firm and immediate action was required to redress this, particularly as several months of the financial year had already passed.
The commissioners decided to approach the problem on an area basis, requiring each of the four health districts to contribute to the whole. As a first step, they enforced "housekeeping" economies, such as the vigorous review of all vacancies and the use of agency staff; a reduction in overtime levels; an urgent review of existing and proposed bonus schemes; a reduction in catering costs and a review of charges to staff for meals; measures to ensure that all income owing to the commissioners was properly received; a reduction in cleaning and other domestic support services; and a continuation of a freeze on management costs. They also decided that patient activity levels should not exceed those obtaining in 1977–78 and in certain cases should be reduced below that.
Those measures were insufficient to achieve the financial savings required. The commissioners, therefore, decided upon additional economies, including the temporary closure of the in-patient services at St. Olave's hospital. They also decided that there should be a general reduction in district acute services, which will bring provision more into line with the decline in the population of inner London in recent years.
The beds in the Guy's health district allocated for acute specialties are being reduced from 875 to 763 beds—a reduction of 112 beds. No reduction is proposed in the number of beds used for obstetrics. Neither are any reductions proposed in the beds allocated for the elderly, mentally ill, younger chronic sick and children.
As part of this overall reduction in acute beds, the 223 beds located at St. Olave's hospital are to be reduced to 182 and these can be accommodated at Guy's and New Cross hospitals by opening additional wards. The general medi-

cine beds are to be transferred to Guy's and New Cross hospitals, the general surgery beds to Guy's hospital, the psycho geriatric beds to New Cross hospital, and the psychiatric beds to Guy's hospital.
The original proposal was that the general surgery beds at St. Olave's would be transferred to Guy's and New Cross hospitals, but the operating theatres at New Cross are in need of repair, and all the general surgery beds will now, initially, go to Guy's. To facilitate this, the 24 geriatric assessment beds at Guy's will be transferred to New Cross hospital. I hope that that is now entirely clear to the right hon. Gentleman.
There is a firm commitment on the part of the local district management team to re-establish the geriatric beds at Guy's as quickly as possible. It is hoped that the operating theatres will be renovated in time for this to be achieved early in the new year.
Out-patient services will continue at St. Olave's. The staff residential accommodation is also to be retained in use. The hospital is not, therefore, being closed.
There are three psychiatric day hospital units at St. Olave's. Of these, one was opened in the late 1960s and is now taking about 50 patients from the community. This will continue at St. Olave's. The second unit, which opened in 1973, is more in-patient-oriented and is to be transferred, together with the inpatient unit, to Guy's hospital. The remaining unit—a psycho geriatric day centre, which was recently completed—cannot yet be opened because of shortage of funds.
May I at this stage comment on the physical state of the hospital, to which the right hon. Gentleman referred? He mentioned that a considerable amount of money had been spent on the building, and we accept that. In 1971 there was major upgrading at a cost of about£200,000 and this was followed by further upgrading of wards in 1973. The sum of £20,000 was spent on the kitchens in 1977, though I should say that to carry out the full recommendations of the environmental health inspector another £100,000 might well be needed. In 1978–79, £40,000 was spent on the psycho-geriatric day centre which I have already mentioned. However, I am told that the


boilerhouse has only a very limited life and will need replacing soon at a cost of approximately £200,000-£300,000. So although, as the right hon. Member has said, the fabric is in reasonable condition and in recent years upgrading work has been carried out, the hospital will soon require further major investment.
I turn now to the current situation at the hospital. I understand that by the weekend there will be only about 40 patients left in the hospital, of whom 30 will be psycho geriatric cases. The district management team wishes to move these patients to their new locations and considers that because of the difficulties in splitting staff between sites it is essential for the welfare of the patients that these moves take place. I am sure that the right hon. Member will use his influence with those who are picketing the hospital to allow the patients to be moved with the minimum of upheaval and fuss. It would be wrong for psycho geriatric patients to be used as pawns in an attempt to frustrate decisions which have been properly taken and keep the patients in that hospital. Furthermore, any delay in achieving savings through the measures already decided can only lead to further cuts having to be made later in the year.
I understand that the district management team met staff representatives this evening and that the staff representatives have agreed to withdraw their pickets, but I am not sure whether this agreement necessarily affects the other pickets who are not members of the hospital staff. I very much hope that all picketing will cease shortly.
Finally, I know that there is great concern about future allocations to the area. At present there is little that can be said about this. A great deal of work is in progress on planning future health services in London. As is set out in the consultative paper "Patients First" published earlier this week, reports are soon to be published on a wide range of developments and the University of London's working group chaired by Lord Flowers is expected to report in February. There are also two reports, which need careful consideration, specifically about the allocation of resources, to which the right hon Gentleman referred. The first, which has been issued, concerns the allo-

cation of resources between areas within the four Thames regions. The second, which is still in preparation, will include a review of the elements in the national formula to provide for the special needs of teaching hospitals. Until these reports have been fully digested, it is impossible to predict what the right future level of resources should be for this area. There can, however, be little doubt that, as a study of the profile on acute hospital services in London, recently published, makes clear, this area at present has far more acute beds than would seem appropriate for its population, and major long-term changes in the pattern of services are unavoidable.
It is important to emphasise that the changes now taking place at St. Olave's—the transfer of in-patient services—are essentially a short-term measure. The commissioners recognise that St. Olave's hospital is a valuable asset for the NHS and they will be considering as soon as possible what the future use of the hospital should be. It is not envisaged that St. Olave's should remain closed for any longer than is necessary. It may well have to care for a different type of patient in the future, but it is clear that the hospital should be given a viable and useful role in the longer-term plans for the district—

Mr. Mellish: When?

Sir G. Young: —once the present financial difficulties have been resolved. The commissioners have undertaken to consider the future use as soon as is practicable and have agreed that the district management team should now set up, as part of its planning machinery for the development of health services in the district, a St. Olave's committee. This committee is to examine possibilities for the future use of the hospital, and representatives of the community health council and staff interests will be invited to serve on it.
I hope that the right hon. Gentleman will accept that progress is being made and that his debate tonight has been worth while.

Question put and agreed to.

Adjourned accordingly at ten minutes to Twelve o'clock.